The times when China served merely as an extended workbench for German companies are definitely over: 87 percent of companies active on the Chinese market cite growing local demand as their main growth driver. Correspondingly, 83 percent see the development of new products specifically for the Chinese market as crucial to their success over the next 5 years. This was confirmed by a survey of more than 500 companies, conducted by the German Chamber of Commerce in China together with Staufen AG business consultancy.
The focus of German companies in China is on the needs of local customers, particularly their satisfaction with products and services. More than one in two companies therefore adjusts goods specifically to the Chinese market; one in three under-takes completely new product developments. “German companies have realised that a one to one transfer of German products to the Chinese market does not work”, explains Dr Ulrich Frenzel, Research and Development expert at Staufen AG business consultancy. “Customer needs in China are significantly different from those in Europe. This applies equally to consumer and to investment goods. For example, industrial customers in China have no need for highly sophisticated premium products, but require robust, technically straightforward machines at affordable prices.” At present, though, the decision as to which goods are offered to Chinese customers still lies mainly with German managers. In 55 percent of companies, an executive from Germany is responsible for product innovation and initiates changes or new developments – generally jointly with the head office in Europe. At present, there is hardly any cooperation between German companies and local universities or research institutes. “These results show: German companies have still got a way to go until they arrive in China properly”, Staufen expert Frenzel explains. “The challenge for German companies is a clear expansion of their networks with local partners. This is the only way for them to fully meet the requirements of their Chinese customers.” You can order a copy of the study at Dr. Ulrich Frenzel (email@example.com) Link to the study by the German Chamber of Commerce in China (general part) http://china.ahk.de/market-info/studies/business-confidence-survey-2013/