1) Carrefour
Carrefour is widely considered the most successful foreign retailer in China. When taking into account that it’s currently Europe’s largest (and the world’s second largest) retailer, that isn’t hard to believe. From its entry into the market in 1995 until 2000, Carrefour built stores in 15 Chinese cities, including Shanghai, Beijing, Chengdu, Shenzhen and Guangzhou. These fifteen cities alone generated over 12.5 billion rmb by 2004. According to the China Retail Ranking index, Carrefour had officially overtaken local Chinese retailers in sales of “fast moving consumer goods” (like food and household cleaners) by 2005. From 2009-2010, Carrefour built seventy new outlets in China, and China currently has over 163 Carrefours throughout the country.
China clearly attracts business-minded people the world over. It’s not, however, as easy as it may seem. Here are some of the more successful foreign ventures in China.
2) Microsoft
Since coming to China in 1992, Microsoft has thrown most of its weight into establishing itself as the stronghold of computer technology. It set up the Microsoft Global Technology Center, the Microsoft Asian Research Institute and the Microsoft Research and Development Center all within the first few years of moving a large portion of its operations to China. Since then, Microsoft has invested over 19 million RMB to launch the Zhonguancun Software Limited Company with Stone Group, the Beijing Centergate Technologies Company, and the Shanghai Microsoft Software Company.
3) KFC
Chances are you don’t pass a single day in China without seeing at least one KFC. So it should come as no surprise that KFC is one of the most successful business ventures in China, with more than 100 restaurants in Shanghai and Beijing alone. Since its introduction into the country, KFC has expanded from 20 cities in 2000 to over 280 Chinese cities last year. Yum Foods, the corporation that owns KFC (along with Pizza Hut and Taco Bell) generated 1.7 billion RMB in 1998. While this certainly sounds impressive, it pales in comparison to the 6.7 billion they made in 2009.
Sam Su, president of Yum’s China division, was quoted as saying China is “the ultimate marketplace” and predicted that the number of KFC’s in China will one day outnumber those in the United State, which are currently around 5,500. Over half of the company’s international profits come from China alone, and with a projection of 275 new KFC restaurants being built per year in China, it doesn’t look like this behemoth will be slowing down anytime soon.
4) Volkswagon
In China since 1984, they are the second largest foreign automobile manufacturer in China, behind General Motors, and continue to pour money into the country in order to increase production. Volkswagon has already introduced multiple car models into the Chinese market, including the Passat, Gol, Polo and Santana, but it was announced earlier this year that it will attempt to increase sales from 150,000 units to 500,000 units just in south China by 2015. In April, it invested 13.4 billion RMB in China with the purpose of building two new plants and introducing newer models, such as the 2011 Phaeton that was unveiled at the Beijing Auto Show this year. This money is in addition to the 38 billion RMB they already plan to spend here through the year 2012.
5) Nokia
Nokia may have set up its first office in China in 1985, but its relationship with China actually began much earlier than that in the 1950’s. The late 1990’s saw Nokia establishing its main manufacturing centers in China, and in recent years has increased participation in helping develop China’s digital industry. Since 1985, Nokia has become the largest exporter of mobile telecommunications (such as cell phones, multi-media equipment and relay stations) in the country, employing over 4,500 people in fifty offices throughout China. China is now Nokia’s single largest market, largely a result of Nokia’s big push in 2001 to increase its presence here. In that year alone, the company increased its China exports by fifty percent, bringing the total to about 17.5 billion RMB worth of products.
6) Boeing
With a presence in China since 1971, Boeing has established airport representative services and technical support facilities, in addition to partnering with the Chinese government in airplane assembly, maintenance and spare parts supply. Boeing has consistently grown, with the number of airplanes doubling since 2001 to a total of more than 1,300. The International Civil Aviation Organization also announced during this period that the number of airline passengers in China had increased as well, from 83 million to 202 million.
The announcement by Boeing’s 2005 Commercial Market Outlook this year that it will supply freight planes to China Cargo Airlines, and its projection that Asia will make up about thirty-six percent of Boeing’s total deliveries over the next two decades, indicates that Boeing’s growth will not stop any time soon. There are currently over 6,000 Boeing employees here in China.
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