The answer may disappoint many – to a lot of multinational companies, China is still a relatively small market. As shown in the chart published by Netease, Carrefour supermarkets, which can be seen everywhere in China, only got 10% of its 2011 global revenue from China. Coca Cola got about 7%. The only company that will have a hard time leaving China is probably KFC, which got nearly half of global revenue from China (49.8%).
According to the Netease article, the Economist Intelligence Unit (EIU) reached the same conclusion in their year-end research report last year – though the global recession has made multinational companies more dependent on China’s market to bring in more sales, China remains a relatively small piece of the global cake for many. The EIU report was based on surveys and interviews of 328 non-Chinese multinational senior management, business scholars and market analysts. Only 8% of those surveyed considered China as their biggest market. 17% expected China to become their biggest market in 5 years, and 21% expected the same in 5 to 10 years.
Among the 70 multinational companies that revealed their China sales numbers, only 10 got over 20% of their global revenue from China. They are Mead Johnson, Cartier, BHP Billiton, Yum, Advanced Micro Devices, etc. But more than half of the 70 have less than 10% of their global revenue from China.
According to the report, multinational companies still have their eyes on China but also show signs of spreading their investments around the globe to balance their strategic structure. Among those interviewed, 37% consider China as extremely important to their global strategy, compared with 53% from 2004’s report. Another 33% think that China, though not yet in a critical position, still holds important strategic significance, also a slide in number compared with 41% from 2004. [Click here to read original article in Chinese]