Asia contains some of the world’s fastest-growing major economies, and China and India are the only countries with populations exceeding 1 billion.
It’s no surprise, therefore, that they both have dynamic business-to-business sectors and fast-growing consumer markets. This makes them ideal locations for European companies seeking to expand internationally and offset slower domestic growth rates.
To succeed in the business-to-business sector in India and China, companies need to bring know-how, experience and products that are unavailable locally, and actively support the evolution of local infrastructure, standards and employment. At the same time, it’s essential to offer competitive pricing, which is only ensured by establishing local production capabilities. Many of the most successful European businesses in India and China are those which both produce and sell locally.
In both countries, the middle classes are growing rapidly in numbers and wealth, creating vast new consumer demand. Western companies that successfully understand how to serve these consumers can earn significant returns, but need to consider their entry strategy carefully and plan for the longer term. There is a clear appetite for western goods but simply transplanting European brands may not be sufficient for local, increasingly sophisticated consumers. Local partnership is essential to understand where adaptation is needed and which distribution
Our offshoring experts in Europe and our on-the-ground teams in Asia are working with more than 50 of our European portfolio companies to help them develop their market presence in India and China.
The companies we partner benefit from our Asian expertise in a range of ways:
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For German precision-grinding machine manufacturer Wendt, our contribution to their development in China has been a key element of our support. When we acquired the company, in 2004, it already had a long-established track record in offshore production through a joint-venture in India. We helped the business to open offices in Shanghai and Beijing and have since helped guide the strategy, as well as introducing a number of contacts, with a view to establishing a manufacturing capability in China. This will enable Wendt to better serve the Chinese automotive market, with its super abrasive grinding tools, from a domestic production base.
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Danish company Damcos is a leading provider of hydraulic equipment and integrated tank measurement systems for the marine industry. One of its strategic priorities has been expanding its activities in the Chinese market. Our Shanghai and Hong Kong offices worked with Damcos as it established a manufacturing capability in JinQiao Export Processing Zone, 20km from downtown Shanghai, at the mouth of the Yantze River. JinQiao is the first comprehensive and multi-functional export processing zone in China.
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Based in France, Dirickx is a leading manufacturer of security fences. Starting with a representative sales office in Beijing in 2002, Dirickx has now grown its Chinese operations to include an 8,800m² manufacturing facility in Huairou, which employs 130 people. We have helped the company to develop its contacts with central and local government, and these have helped it to pursue and win a number of contracts to supply large infrastructure projects, including the 2008 Olympics.
