Home to industry leaders Tencent, Mindray, BYD, and Huawei, Shenzhen has emerged as a leading city for China business development, higher technology, and innovation. That’s why it is such an ideal location for CSOFT to launch the Globalization • Shenzhen 100 project. Today, we sit down with Robert Ritacca, a lead researcher from CSOFT Globalization Institute (CGI) behind the Shenzhen 100 project, to give us a more in-depth look into what this project is all about.
What is the Globalization Shenzhen 100?
Robert: The Shenzhen 100 is a list of globally mature companies in Shenzhen. Using a CGI proprietary model to capture both hard and soft data about these companies, we are able to measure their global maturity in a way that can capture value-added information about each company. These companies will be the most dynamic and, in many respects, the most globally ready companies in Shenzhen.
Why Shenzhen? Why not Beijing or Shanghai?
Robert: There are a lot of startups in Beijing (and even in Shanghai) but the culture in every city is different. I feel Beijing is more of a center for politics and large established businesses than it is a startup, tech, and globalization hub. Even walking through Zhongguancun – an area sometimes called Beijing’s “Silicon Valley” – I didn’t get the positive startup feeling that I did from some of the areas in Nanshan District in Shenzhen. Additionally, Shenzhen offers strategic locational advantages being near Hong Kong, and it was the first city to be declared as a “Special Economic Zone” by Deng Xiaoping during China’s reform and opening up period.
The attitude and spirit of Shenzhen feels overwhelmingly more positive than anywhere else I have seen. The local government is extremely open minded and willing to explore different ways to create benefits for local companies and glorify their districts. It’s a new city: thirty five years ago, it was nothing but a small fishing village.
Shenzhen has also been a hub for original equipment manufacturers (OEM) for the majority of the last 35 years. These OEMs have gotten years of experience and now have the attitude that “I can do this on my own.” That’s why you see Shenzhen as a startup city, attracting talent and entrepreneurs from all over the nation.
The Shenzhen 100 report won’t be released until June, but can you give us a sneak peek?
Robert: Absolutely! We have had a few initial meetings with startup leaders in Shenzhen and found that there are two types of companies that are going global. The first type resembles the most mature companies in Shenzhen: they have been in business for a very long time, have experienced tremendous success in China, and transformed their business models to capture the global market; we call them “Mature Transformers.” Some examples of these companies in Shenzhen include Mindray, TP-Link, and Huawei.
The second type of company that we are seeing is quite different. Because markets are changing, and technology is allowing businesses to develop in completely different ways than in the past, we are seeing relatively younger Shenzhen-based “startup” companies that do not need to go through the same maturation process of their predecessors. They are essentially launching a global product or service as they incorporate: they are born global. Over time, we expect this type of company to be a key ingredient of Shenzhen’s future success. Companies that most resemble this business model include Seed Co, Kuang-Chi, and Da-Jiang. We call them “Start Up – Fast Rising companies.” Our research will focus on these two types of companies and quantify their maturation processes.
What can your audience learn about your report?
Robert: Our report looks to clarify a couple of things:
Firstly, the most well-known companies in China — Baidu, Alibaba, and Tencent (or “BAT”) — are actually not globalized firms. They are extremely successful in China because the consumer goods and services market is both very large and continuously growing, but they have not adjusted their business models to conform to a global user base. It’s doubtful that Baidu can compete with Google, Alibaba with Ebay, and Tencent with Facebook or WhatsApp, outside of their home market. Secondly, our report will generally focus on companies that have the desire to create a global business model which can integrate their product or service with the specific wants and needs of a global user base.
The report will have two top 10 category lists: the Top 10 Transformers and the Top 10 Risers, as well as our main list of 100 globally mature or maturing Shenzhen companies. More on this, and on the overall Shenzhen business landscape, will be included in our first Globalization Shenzhen 100 report which will be released in June 2016. Stay tuned for more insightful content about the Shenzhen 100 project on our CSOFT blog. If you have questions about the initiative, feel free to contact us at shenzhen100@csoftintl.com.
To learn more about the Globalization • Shenzhen 100, please visit www.shenzhen100.com.cn or email shenzhen100@csoftintl.com.
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