Core Value and Talents: key for China’s agrochemicals players into overseas market
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Interview on CCM’s founder: Wu Zhonghui
Guangzhou China, May 17, 2011-The fundamental problems that have become the bottleneck for China’s agrochemical industry to explore overseas business are little knowledge of core value of overseas market and lack of talents, pointed out by Mr. Wu Zhonghui, the founder of Guangzhou CCM Information Science and Technology Co., Ltd., (abbreviated as CCM) during a recent interview by The Agriculture and Market, an influential magazine on agricultural industry.
When asked what the key factors hindering Chinese agrochemicals players’ overseas business development are, Mr. Wu shared his insights on this question. During consultancy work in the past, CCM found that some domestic companies spent several million US dollars a year to explore overseas market simply by assumption or feeling. The result is that few of them have made profit, as lack of enough knowledge of the characteristics and core value of westerners make it difficult for Chinese players to manage overseas teams.
Besides, they don’t understand the market demand and market operation model of overseas market. Take glyphosate for example, it is the largest herbicide in the world. In domestic market, the only thing that manufacturers need to do is to sell its products to distributors or traders, while in overseas market, the manufacturers have done much more than that. They have spent huge money to research and develop the specific formula of glyphosate used for different crops and against different weed. They have applied for patents to strictly protect their research fruit. As long as farmers use such concentration of glyphosate for weeding, they need to pay relative fees to these companies. So the profit to overseas companies lie in the end user of the value chain, while most domestic players, even those leading and big ones, stop at technical supply. The fact that Chinese players don’t know much of overseas market and sales model has stopped them from succeeding in overseas business exploration.
Besides, lack of talents, especially professional management talents with good understanding of overseas market, makes it difficult for Chinese agrochemical enterprises to get through in overseas market, not to say manage the overseas team with western or other cultures.
Mr. Wu also thinks that China’s agrochemical industry has misinterpreted the industry integration concept and hasn’t paid enough attention to value chain planning. “The heatedly discussed industry integration in China is limited to industry integration for may Chinese players. However, the real industry integration actually is the coordination and cooperation between the high end and the low end of the value chain, and it is the sound cooperating model between different enterprises, instead of scale expansion. Not knowing this actually reflects the fact that some domestic enterprises are lack of strategic insights.”
As to cooperation with overseas players, Mr. Wu reminds Chinese players not to place themselves in an unreasonable low position. Low price and price competition can’t help them win respects from their overseas partners. The positioning problems that Chinese players face in cooperation with overseas enterprises actually is rooted with the incompetence of Chinese enterprises’ management staff, China’s current supervision system, and without the really needed support provided by the government.
Mr. Wu also shared his opinion on the different roles that consultancy has played in the decision making process in domestic and overseas enterprises and a point Chinese players need to improve in future in order to catch up with their foreign counterparts.
The whole article of this interview can be found in the June Issue of Pesticide Marketing Edition of The Agriculture and Market magazine. For more views from CCM, you can visit our webpage for press room http://www.cnchemicals.com/PressRoom/PressRoom.aspx, or contact us at econtact@cnchemicals.com.
About CCM
CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/ Export Analysis all through its new proprietary product - ValoTracer.
CCM International, Ltd. Guangzhou CCM Information Science & Technology Co, Ltd. 17th Floor, Huihua Commercial & Trade Building No, 80 Xianlie Zhong Road, Guangzhou 510070, China http://www.cnchemicals.com