From "Why go global?" to "Where to go?" and "How to go?", from singular to diversified profiles of overseas enterprises, from Southeast Asia to the Middle East, Africa, and South America, in 2024, Chinese enterprises are sailing deeper into the ocean.

Author | Dou Dou

Editor | Uncle Pi

Produced by | Chanyejia

In early summer 2024, the sunshine on London's streets witnessed a business spectacle - HEYTEA's first overseas flagship store debuted in England, instantly igniting social media with unprecedented queues stretching for seven hours, comparable to a festive celebration, heralding the stunning arrival of Chinese tea drinking forces overseas.

Meanwhile, Chinese coffee upstart KUDI is swiftly expanding into Southeast Asia, boldly declaring its intention to open 400 stores in Indonesia. Such a bold move has attracted industry attention, adding to the surging tide of Chinese enterprises going global.

Looking back, the path of Chinese enterprises going global may have once been unsteady, but in the first half of 2024, the tentative explorations have transformed into a clarion call for head-on confrontation. The global business battlefield has officially sounded the alarm for intense competition.

Amid the wave of globalization, as the economic landscape reshapes, Chinese enterprises are unwilling to be content with a corner of the world and are setting sail, casting their eyes on every corner of the globe. From the prosperity of Europe and America to the fertile soil of Southeast Asia, from the mystery of the Middle East to the vastness of Africa, and the passion of Latin America, the presence of Chinese brands can be seen everywhere. Going global has become an essential path for enterprise growth.

However, this journey is not smooth. Especially in emerging markets where digital infrastructure is still nascent, Chinese enterprises, like explorers, urgently need the strong backing of cloud service providers - data centers, cloud computing, AI intelligence, none of which can be lacking. They must build a solid digital great wall in foreign lands, optimize supply chains, and streamline every link in logistics, marketing, and payments.

In the first half of 2024, we saw some new changes:

Cloud computing giants accelerated their conquests across the globe, with South America, the Middle East, and Africa becoming their new territories;

China's AI large models, unwilling to remain idle, partnered with overseas players, and C-end products blossomed competitively;

Restaurant giants like Haidilao and Xiaolongkan expanded overseas, driving a surge in procurement demand from medium-sized customers;

China's express logistics network wove a new chapter overseas, constructing a Chinese speed connecting the world;

ESG compliance became the sword of Damocles hanging over every overseas enterprise, threatening to doom them abroad with the slightest negligence;

In summary, the drama of going global in 2024 is not merely about the expansion of the business landscape but also a comprehensive competition of wisdom, courage, and compliance capabilities. Chinese enterprises are writing their own great voyage with unprecedented determination and strength.

I. Latin America and the Middle East, new "gold mines" for cloud providers

As the global economic landscape evolves, Latin America and the Middle East have become new "gold mines" for Chinese cloud service providers. These regions, with their unique geographical locations, abundant resources, and growing market demand, have become new blue oceans eagerly sought by cloud vendors.

On March 6, at LEAP 2024, a technology event held in Saudi Arabia, Tencent Cloud partnered with local telecom service provider Mobily to launch the "Enter Saudi Arabia" initiative. Leveraging the powerful technical support of Tencent Cloud's TCE (Tencent Cloud Enterprise) platform, Mobily will create a new cloud service platform for enterprises, accelerating Saudi Arabia's digital transformation and opening a new chapter for Tencent Cloud's business development in the Middle East.

Just two months later, on May 21, at Huawei Cloud's Egypt Launch Summit 2024 held in Egypt, Huawei Cloud announced the official opening of its data center in Cairo, becoming the first company to offer public cloud services in Egypt. Simultaneously, Huawei Cloud unveiled a standard Arabic large model with 100 billion parameters.

Immediately after, on May 23, Alibaba Cloud announced plans to invest in new data centers in five countries worldwide - South Korea, Malaysia, the Philippines, Thailand, and Mexico. This means Alibaba Cloud will expand from its current 89 availability zones across 30 regions to 95 availability zones across 31 regions.

These moves demonstrate that for Chinese cloud service providers, overseas market expansion can not only alleviate pressure from domestic market competition but also open up broader development opportunities and enhance brand international influence.

According to relevant data, Alibaba Cloud's market share in the Asia-Pacific region continues to climb, Tencent Cloud's user base in Latin America has increased by over 30%, and Huawei Cloud's application cases in the African market have also increased significantly.

This change is closely related to local policy support and growing market demand.

According to the "Middle East Cloud and Data Center Growth Report" by market research firm ResearchAndMarkets, all six Gulf Cooperation Council (GCC) countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates - have embraced cloud services as a new trend for economic development.

Meanwhile, under the Belt and Road Initiative, the demand for infrastructure construction in countries and regions along the route is increasing, and cloud computing can help these regions achieve strategic transformation of their economic structures more quickly.

However, cloud service providers still face challenges in these emerging markets, such as inadequate infrastructure. Overall, the expansion momentum of cloud vendors in overseas markets remains robust, and this trend seems to be accelerating.

It is worth noting that changes in overseas destinations are prevalent among enterprises in other sectors as well, but the changes among cloud vendors are more pronounced overall.

II. Large AI models Intensive sea going “ Test water ”

China's AI large models are accelerating their "going global" efforts.

China's large AI models are stirring up a new technological wave globally. With technological advancements and continuously expanding application scenarios, Chinese enterprises are accelerating the internationalization of their AI technology, particularly in Southeast Asia.

In May 2024, Alibaba Cloud announced that its large model service platform, Bailian International, would soon launch, offering one-stop, fully managed large model customization and application services.

At the 2024 Mobile World Congress, iFLYTEK announced the launch of its products, including iFLYREC Smart Interpreting and iFLYREC Smart Writing, in overseas markets such as Saudi Arabia, Singapore, and Malaysia.

Zhang Peng, CEO of Zhipu AI, also stated that Zhipu AI is currently expanding its overseas business, targeting international enterprises entering China and Chinese enterprises going global.

In fact, some large model vendors began globalizing last year, but their products and application scenarios were more oriented towards C-end customers.

For instance, in June 2023, MiniMax launched Talkie, an AI virtual character chat software primarily targeting overseas markets. According to public product data, Talkie has been downloaded nearly 14 million times since its launch, with a total revenue of nearly $830,000.

This year, with the upgrading of large model technology and continuously expanding application scenarios, e-commerce and logistics, where domestic enterprises excel, have become the primary targets for Chinese large models "going global" in Southeast Asia. Through innovative methods like AI digital human livestreaming, these models can quickly penetrate the live e-commerce sector at a low cost, thereby increasing business volume and market share.

However, domestic large models still face significant competitive pressure when going global. Compared to international competitors that have established brand recognition globally (such as OpenAI's ChatGPT), Chinese large models have lower awareness in overseas markets.

Moreover, market demands vary significantly across regions, posing a significant challenge in quickly adjusting products and services to meet specific market needs.

In terms of business models and profit models, those proven effective in the domestic market may not suit the overseas market and require reassessment and adjustment. Additionally, initial investments are substantial, with long return periods, especially in infrastructure construction and market development.

Therefore, while going global is inevitable for domestic large model vendors, they are still in the "trial" stage.

III. Supply chains following enterprise demands, officially "going out"

In 2023, the overseas development of China's catering industry was in full swing, with many domestic catering brands not only occupying a place in the domestic market but also stirring up considerable waves in the international market. The speed and scale of their overseas expansion are astonishing.

Taking Haidilao as an example, this hotpot giant has opened 115 branches overseas, with footprints spanning the world. Chongqing Liuyishou Hotpot is not far behind, with 66 overseas outlets. Xiaolongkan and Shu Jiuxiang, two other hotpot brands, have also opened nearly 40 and 6 branches overseas, respectively.

While hotpot is undoubtedly a representative of Chinese cuisine, other types of food are also warmly welcomed by overseas diners. Too Second Sour Fish is a prime example, with four overseas outlets and plans to add 20 more this year. Specialties like sour fish, spicy hot pot, and spicy crayfish are gradually conquering the palates of global diners.

The tea and coffee markets are also booming. The brand Mixue Bingcheng has over 36,000 stores globally, with 4,000 located overseas. Tianlala has opened six branches in Southeast Asia, while Luckin Coffee has established 30 outlets in Singapore within just one year. KUDI Coffee has also opened 23 outlets in ten overseas countries, demonstrating its robust international expansion momentum.

The success of these catering brands not only brings more international influence to Chinese cuisine culture but also drives the development of supply chain enterprises.

According to a report by Huafu Securities, raw material costs account for up to 42% of total costs in the catering industry, highlighting the crucial importance of controlling raw material costs and quality for catering enterprises. Therefore, many catering brands are actively building their supply chain systems to ensure the freshness and quality of ingredients while expanding into international markets.

In the past, supply chain enterprises often preferred to serve large multinational corporations such as Yum! Brands (KFC, Pizza Hut), McDonald's, and Starbucks. However, with the rapid rise of Chinese brands like Haidilao, Xiaolongkan, Chabahdao, and Luckin in overseas markets, the demand for supply chains has increased, especially for medium-sized customers seeking customized services.

Entering 2024, new opportunities have arisen for the overseas development of catering supply chains. Supply chain enterprises are no longer content with providing basic services but are seeking deeper cooperation models, such as enhancing logistics efficiency through technological innovation or adopting more eco-friendly packaging materials in response to global sustainable development trends.

This phenomenon is not limited to the catering industry. As Chinese new energy vehicles and other manufacturing enterprises establish production bases and sales networks globally, supply chains continue to extend and optimize. The global layout of supply chains has become an irreversible trend, supporting Chinese enterprises in going global while offering more diverse choices for global consumers.

In summary, the overseas expansion of China's catering industry is not just a feast of cuisine but also an exploration journey of supply chain innovation and cooperation. In the future, we can expect to see more Chinese brands shine on the international stage while witnessing continuous transformation and development in the supply chain sector.

IV. Chinese express delivery companies weaving a global "web"

The development of China's express delivery and logistics industry in recent years has been a race of speed and passion. As the domestic market becomes increasingly saturated and competition intensifies, major express delivery and logistics companies have turned their attention to the broader international market.

From J&T Express, SF Express, "Three Links and One Up" (ZTO Express, YTO Express, STO Express, Yunda Express), JD Logistics, Cainiao Network, and other well-known companies, all have demonstrated a strong ambition for overseas expansion. Especially in the first half of 2024, this trend reached a new high, with companies accelerating their internationalization strategies compared to last year's initial attempts.

In 2023, Chinese express delivery and logistics companies made initial layouts by establishing overseas branches, building overseas warehouses, and setting up logistics hubs.

Southeast Asia, particularly countries like Thailand, Malaysia, and Indonesia, has become a favorite among many companies due to their large populations and rapidly developing e-commerce markets.

Chinese express delivery companies have not only established their logistics infrastructure locally but also collaborated with local enterprises in various forms, such as acquiring local express delivery companies and forming strategic partnerships with e-commerce platforms, aiming to quickly integrate into local markets and seize opportunities.

Entering 2024, the overseas expansion pace of Chinese express delivery companies further accelerated. In addition to continuing to deepen their presence in Southeast Asia, they have also extended their reach to more distant regions such as the Middle East, Europe, and North America. To enhance the coverage and delivery efficiency of their global logistics networks, companies have spared no effort in adding overseas warehouses, optimizing delivery routes, and introducing advanced automation equipment and technologies.

For example, in some critical node cities, companies have built highly automated warehousing centers to reduce delays and errors caused by manual operations.

Moreover, the application of cutting-edge technologies such as cloud computing, big data, and the Internet of Things (IoT) has continued to deepen, not only enhancing the overall intelligence of the logistics network but also effectively reducing operating costs.

Through data analysis, companies can more accurately predict market demand, optimize inventory management, and provide more personalized services. Additionally, utilizing IoT technology, the logistics process is fully traceable, significantly improving transparency and customer satisfaction.

It is worth mentioning that Chinese express delivery companies face numerous challenges during their overseas expansion.

For instance, cultural differences among countries, varying legal and regulatory requirements, and high international logistics costs are issues that need to be addressed. However, with strong capital support, technological innovation capabilities, and a deep understanding of the market, Chinese express delivery and logistics companies are steadily realizing their globalization dreams.

In summary, it can be seen that in 2024, domestic express delivery companies have gradually established China's overseas logistics network.

The overseas expansion of China's express delivery and logistics industry is a war without smoke, but behind this war lies the boundless aspirations of Chinese enterprises for the future. It is foreseeable that within the next few years, China's express delivery and logistics industry will play an increasingly important role on the international stage.

V. ESG compliance becomes the "lifeline" for going global

ESG compliance, amid the wave of globalization, has transformed from a soft pursuit of enterprises into a hard threshold for the path of going global, its importance increasingly prominent, akin to the "lifeline" for enterprises crossing borders and expanding into international markets.

This is not just a choice that conforms to the trend of the times but a compulsory question for the survival and development of enterprises. As the concept of global sustainable development takes root in people's minds, governments, non-governmental organizations, consumers, and even investors worldwide consider ESG performance an essential measure of corporate value. Especially for enterprises aspiring to "go global," neglecting ESG compliance is akin to cutting off their own path.

Once upon a time, ESG may have been a marginal issue for many enterprises, but in 2024, this situation has fundamentally changed.

A series of Dense regulations issued by the European Parliament and the European Union, such as the "Directive on Empowering Consumers for the Green Transition," the "New Battery Regulation," the "Regulation Prohibiting the Placing on the Market of Products Made with Forced Labour," and the "Corporate Sustainability Due Diligence Directive," all indicate that ESG compliance has shifted from an initiative to a mandatory requirement.

The implementation of these regulations not only requires enterprises to achieve green transformation in all aspects such as product design, production, and supply chain management, but also emphasizes transparency and responsibility in social responsibility and corporate governance. Zero tolerance for "greenwashing" has elevated ESG compliance to an unprecedented level.

Facing increasingly stringent ESG standards, overseas enterprises undoubtedly face enormous challenges. On the one hand, enterprises need to invest more resources in technology research and development, supply chain optimization, environmental protection, and social responsibility projects, which undoubtedly increases operating costs.

On the other hand, the complex international regulatory environment requires enterprises to have a high level of compliance awareness and rapid response capabilities. Slight negligence may lead to severe consequences such as legal sanctions, market exclusion, and damage to brand reputation.

However, challenges are often accompanied by opportunities. First, ESG compliance can help enterprises build a positive image, enhance brand value and social recognition, and attract more consumers and investors who focus on sustainable development. Second, through ESG practices, enterprises can discover new growth points and innovation points. More importantly, ESG compliance can also promote internal governance reform, improve operational efficiency, and management level.

In summary, ESG compliance has become the "lifeblood" of overseas enterprises. It is not only related to their compliant operations and risk prevention but also to their sustainable development and future competitiveness. In 2024, only by proactively embracing the ESG concept and actively addressing challenges can enterprises ride the tide of globalization and move forward steadily.

Final Thoughts:

Standing at the time node of 2024, looking back at the past, the mindset and action trajectory of enterprises facing the strategic choice of going overseas unfold like a magnificent scroll.

Once upon a time, the question "Why go overseas?" hung like a mist over the minds of many entrepreneurs, a time when the desire to explore the unknown world was intertwined with a prudent assessment of their own strength. Today, this mist has quietly dissipated, replaced by clearer and more urgent questions: "Where to go overseas?" and "How to go overseas?"

In 2024, the image of overseas enterprises is no longer a copy-paste of a single face but presents an unprecedented trend of diversification. From technology giants to startups, from manufacturing leaders to emerging service industries, enterprises from all walks of life are turning their attention overseas in search of broader development space.

At the same time, the regions for overseas expansion have become vast and boundless. From traditional European and American markets to emerging Southeast Asia, Africa, the Middle East, and even Latin America, Chinese enterprises are embracing the world with a more open attitude. This is not only an expansion of geographical space but also a keen insight into and active response to profound changes in the global economic landscape.

The Age of Great Navigations truly sets sail in 2024, heading deep into the ocean.