With China’s rapid economic development,the world’s largest digital markethas been transfered to the ancient country.In the past 20 years,many Americandigital firms had foreseen that,leading to the fact that many of them triedtheir best to enter into China’s market after China joined the WTO,whichimproved open degree.But they all failed. These digital firms, includingGoogle, Amazon, eBay, and Uber, have successfully expanded internationally byintroducing their products, services, and platforms in other countries.However, China is not the “other one”.
The widely touted reasons for these failures include censorship by theChinese government and cultural differences between China and the West. Well,these factors undoubtedly have played a role, but such explanations are overlysimplistic.
Google, for example, has succeeded in dominating many foreign markets thathave radically different political systems and cultures ,including Saudi Arabia,Indonesia, and Thailand. And these factors have not stopped Westernmultinationals from succeeding in China in car manufacturing, fast-movingconsumer goods, and even sectors where culture plays a key role, such as beer,coffee shops, fast food, and the film industry.
There are deeperreasons behind the systematic failure of Western digital firms in China.
According to the“inside view” and the “outside view” of the phenomenon,it points to alack of strategic determination and patience by western digital firms as themain cause of their failure. This is reflected in seven factors:
Besides, some interviews highlight that these firms failed to “keep theirfeet firmly on the ground.” It led to a series of competitive disadvantages,thereby allowing Chinese digital firms to race ahead in the fight for marketshare.
To capture a slice of the Chinese market, Western business leaders mustrecognize and understand the issues highlighted here. These lessons arerelevant to more than Western digital businesses in China; they can also shedlight on the future competition between Western and Chinese multinationals inother sectors and other international markets.
