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Business / Companies

French firm comes up with China's number

By Liu Lu (China Daily) Updated: 2015-08-03 08:26

"China is a huge, fragmented market. Thus, firms may need to utilize more than one of the above strategies to adequately penetrate the market," Liu said.

The company's customers in China are largely Fortune 500 firms in the automotive, information technology and telecommunications, finance, consumer goods and health care sectors, such as L'Oreal, P&G, Unilever, General Motors, Volkswagen and China Mobile.

At the same time, Chinese firms are increasingly seeking advice from market research firms for their own global moves, said Zhang Jian, secretary general of the China Marketing Research Association.

"Given the concerted national effort to boost China's overseas investment, Chinese firms have an increasing ability to conduct business at a global level," Zhang said.

Chinese outbound direct investment grew from $2.7 billion in 2002 to a stunning $102.9 billion in 2014, a nearly fortyfold increase in only 12 years, according to data from the Chinese Ministry of Commerce.

But Zhang said if Chinese enterprises do not make good use of market research tools, they will run into problems when they test the waters abroad.

Many Chinese enterprises, particularly small and medium-sized companies, have no clear market positioning and a lack of knowledge about local demand.

"To better promote China's Belt and Road Initiative, Chinese enterprises and governmental organizations need to make good use of the service offered by market research companies, to maximize their investments overseas," Zhang said.

China's Belt and Road Initiative refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road, which would use trade and investment to boost ties along the ancient trade routes and elsewhere.

Ipsos also has helped many Chinese firms in their global expansion projects, including Huawei, Lenovo and Haier, Liu said.

"It is very difficult for them to make correct decisions without a good analysis of local markets, so an increasing number of them, even some small and medium-sized ones, are willing to use survey data provided by multinational market research firms," Liu said. Chinese companies account for 30 percent of Ipsos' total revenue in China, a figure that the company expects to grow.

Liu said Ipsos has a well-established global network that can help companies gain a good understanding of overseas markets.

"It is typical now for Chinese clients to conduct global studies. We have had clients for whom we have conducted research in more than 60 countries out of all 87 countries where we have operations."

Liu predicted with the fast development of Internet and mobile technologies in China, Ipsos will have more clients from related businesses such as e-commerce, gaming, digital communication and mobile technology. The company expects such services to be a future growth engine.

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