Credit: CFP

LAS VEGAS, January 24, 2024 (TMTPOST)—The recently concluded 2024 CES witnessed a strong return of Chinese enterprises. According to the Consumer Technology Association, out of nearly 4,000 exhibitors, 1,114 were Chinese companies. While the figure falls short of the pre-pandemic peak of 1,500, it is still on par with the 1,201 American exhibitors.

Established international brands, such as Lenovo, TCL, and Hisense, demonstrated their global capabilities through core technologies, expansive booths, and comprehensive communication strategies. These companies demonstrated experience gained from exploring overseas markets through mergers and acquisitions since the late 20th century. 

Moreover, the CES featured numerous innovative tech startups from China, reflecting the passion and vitality of over a decade of innovation in the mobile internet sector. These startups have become an influential force to be reckoned with in the ongoing globalizing process.

Chinese Model: Can It Work in North America?

Over the past decade, China's mobile internet sector has witnessed rapid development in e-commerce, logistics, mobile payments, and online to offline (O2O). Giants such as Alibaba, Tencent, SF Express, Ant Group, and Meituan have created the Chinese business model. In North America, traces of Chinese tech influence can be found through platforms like TikTok and Temu, as well as companies like UniUni, the last-mile delivery company, and life service provider Fantuan Delivery.

Chen Jie, the Managing Partner of Celtic Asia at 2024 CES

Chen Jie, the Managing Partner of Celtic Asia, and an investor in UniUni and Fantuan Delivery, sees the export of the Chinese model as a primary investment focus. Chen said he would make heavy investments in Chinese entrepreneurs in North America, particularly those integrating proven Chinese models with local market demand. The three key areas he plans to prioritize are AI, new energy industries, and food.

Chen notes that while the U.S. is still a leading innovator thanks to solid underlying capabilities like large models. But when it comes to the application scenarios, ChatGPT offers a potential gateway for the next wave of innovative opportunities.

In North America, opportunities can be found not only in the sales of new energy vehicles (NEVs) but also in the aftermarket. Chen highlights the significant opportunities in the auto aftermarket, such as used car transactions and repairs, for electric vehicles priced over $1,000. He emphasizes that consumers prioritize after-sales service for such high-value products. Based on these insights, Celtic has invested in Carnex, a Canadian startup specializing in repair, used transactions, and financial services for NEVs.

Differentiation and Localization: Two Cornerstones for China's Globalization

Peng Jiarong, the Founder and CEO of iMpact, echoes Chen’s view that the “going global” of the Chinese model is not a simple process of copycatting. It requires adapting to local differentiated needs. U POWER, an intelligent automotive ecosystem technology company, exemplifies the importance of "differentiation and localization."

As a company intended to go global at its inception, U POWER set up headquarters in both China and the United States. With China's first production-ready skateboard chassis, the company aims to empower global scene owners to launch intelligent vehicles locally. The company’s CEO Li Peng stresses that when a company expands its business in a global market, localization matters the most.

U POWER's local operations in the U.S. are managed by local employees, to convert local insights into products. Meanwhile, the localization of products and customers is equally important.

Li observes the global trend of "Anti-Tesla" in the intelligent auto industry, which refers to providing different product experiences. U POWER's skateboard chassis technology empowers local manufacturers in each market to redefine their products, creating locally tailored solutions. For instance, the application scenarios in China are different from those in the U.S., where most families have three to four children. As such, understanding these diverse needs allows companies to produce products tailored to local markets.

The ecosystem of local partners and supply chain localization is equally critical. For instance, recent U.S. legislation requiring supply chain localization for electric vehicles has facilitated collaboration between U.S. and Chinese companies.

Business model export is not solely about "brand export." Li emphasizes the "Powered by U POWER" model, where U POWER provides its capabilities to clients. This model is particularly advantageous in the current backdrop of trade tensions and geopolitical volatilities, as it will promote mutually beneficial cooperation between Chinese and foreign enterprises.

Technology, Scenarios, Reputation: The Three Essentials for Global Development

"To ensure ongoing and firmly established business operations, fostering international development prospects, it is essential to integrate globalization with effective localization strategies," said Zhai Yubo, General Manager of the Carbon Neutrality Division of NaaS Technology.

According to NaaS Technology, the global market, represented by North America, presents huge market demand. Addressing issues such as power limitations in specific regions and providing advantages of distributed energy storage equipment for relevant charging scenes are potential solutions.

Beyond localization, NaaS Technology places significant importance on goodwill. Zhai believes that goodwill is paramount for enterprises during their overseas business expansion.  

Addressing Unmet Needs in Niche Markets

Unlike U POWER and NaaS, Sylvox took a different path. Starting as an overseas ODM, Sylvox transformed into a brand targeting end consumers in various scenarios, particularly with its focus on outdoor waterproof televisions.

Yang Guo, the founder of Sylvox and a veteran of smart displays and special TVs, has also proven to be an entrepreneur in identifying consumer needs. Yang noted that while many giants are trying to get a piece of action in the highly competitive home appliance sector, user demands are still to be satisfied. For instance, consumers wish to watch TV in their pools, gardens, kitchens, yachts, and various other scenarios. These demands inspired Sylvox to launch a full-scenario television brand, currently covering outdoor, bathroom, kitchen, RV, and camping.

Leveraging years of experience and expertise, Yang identified the market demand for waterproofing and gained recognition in the U.S. market with waterproof television technology. In 2024, Sylvox plans to adopt next-gen dynamic backlighting with QLED display technology, achieving ultimate picture quality and brightness while significantly reducing power consumption by 40%.

“The most important thing for a brand is to build a solid foundation before achieving a breakthrough,” said Yang. “A product with strong competitiveness, innovation, and essential features stands as the optimal means of branding and promotion. Consumers will express their endorsement through trust and firsthand experiences.”