KMUs in the era of Web 2.0 - Foundation Office China
Event Reports
The People’s Republic of China has become the biggest online market in the world - at least measured by the numbers of consumers. More and more clients are going mobile. What does this “revolution of communication” mean for small and middle sized enterprises in China? How to adopt new strategies for marketing, finance and management? What lessons can be drawn from other markets, i.e. Germany?
Professor BAI Yongxiu, former dean of the Faculty of Economics and Management at the North-West University Xi’an, stressed in his opening lecture “Entrepreneurship in the epoch of Web 2.0” that China is just at the gateway to a new “model of economic growth”. Whether this model will be successful, might depend on the passion, strength of will and the emergence of a new entrepreneur culture.
Professor XU Mingqi, an expert of financial policy at Shanghai Academy of Social Sciences, analyzed the challenges traditional banking industries are facing when being confronted with mobile e-commerce. Till now they still operate most of the online commerce. However, money transactions by third parties (ALIPAY is the most known example), show an annual increase of 40 percent. XU emphasized that in the future decisions on where to run enterprises will be largely determined by the existence of an innovative environment, but also by a flexible and fair political-administrative framework. Given these conditions, companies located outside huge metropolitan areas like Shanghai and Beijing will profit from the opportunities of the new internet economy. Hangzhou, capital of Zhejiang province, is a good example: the biggest Chinese internet supplier ALIBABA has set up his headquarters due to favorable conditions.
Volker Englert, consultant with the German consulting company KLAKO, compared the challenges for e-commerce in Germany with those in China. He stressed the high regional diversity of the Chinese market(s) and the heterogeneous consumer habits. Although China’s markets shows extremely high growth rates, these characteristics nevertheless represent great challenges to enterprises, especially in B2C. In Mr. ENGLERT’s opinion China’s big advantage is its relatively sophisticated logistics system. However, China has to improve its legal conditions, especially for foreign companies who want to enter Chinese markets.
Professor Dr. GU Ying, head of the CDMI and KAS alumni, analyzed challenges and new approaches for traditional business models on their transformation into an internet based economy. In his opinion the creativity of the employees plays a key role, especially the ability to fully understand the specific new aspects of the internet economy. The crucial challenge for KMU is to find potential clients through an adequate communication platform – to make potential clients real ones.
Dr. DONG Chi, deputy director of CDMI, spoke about new business models in the era of the internet. He used theories of the American management gurus Thomas Friedman and Joseph Pine to question what crowd sourcing and tribe customization will mean for the future of production and distribution in China.
Professor LIU Xiaohai, legal expert on IPR at Shanghai Tongji University, raised attention to the increasing significance of label and trademark rights for Chinese SMEs. Too less SM- enterprises are aware of the importance of protecting property rights and have developed an accurate and strategic approach.
During the afternoon the participants had been invited to an “entrepreneur salon”. Around 120 representatives of small and middle sized companies from Xi’an and Shaanxi analyzed the challenges for agricultural industry, manufacturing industry and the service sector.
Big potential combined with significant difficulties to start business can be found in the food production. Key success factor is to regain consumers’ trust after several food scandals in recent years. The example of the “potato sister” company in Northern Shaanxi, however, shows how quickly even nationwide success can be achieved if consumers can verify the quality of the product. Collaboration with leading food producing nations like USA or Germany is also needed to hit high quality standards.
The traditional manufacturing industry also faces serious changes. Many enterprises must introduce new management systems to meet with high expectations by customers, i.e. real-time availability of resources and make most out of a new “mixed economy “with the service sector.
The new internet economy offers excellent opportunities to actively participate in and profit from the upcoming structural transformation the Chinese economy. This holds especially true for second and third-tier cities like Xi’an, but also rural areas. Well trained and motivated employees as well as politicians and administrators open to the changes are crucial “ingredients” for this new “mixed economy”.
Several local journalists from newspapers and radio participated and made the findings of the conference accessible to people not present through communication platforms like WeChat.
