10 common mistakes Chinese companies make when going abroad

10 Common Mistakes Chinese
Companies Make
when Expanding Overseas
February, 2023

© 2023 daxue consulting
ALL RIGHTS RESERVED
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Why now is the time for Chinese brands
to go global
1. The Chinese economy has entered a new era of high-
quality development, meaning Chinese products are more
competitive than ever.
2. Chinese brands can increase revenue sources.
3. Chinese brands can “put their eggs in more baskets” by
investing in more than just one country’s market.
4. Chinese brands can leverage the country’s advantages,
such as manufacturing and supply chain.
5. Enjoy government support for overseas business under the
dual circulation development policy.

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Early-stage companies that went overseas usually relied on offline
channels to expand their overseas markets. They often sought overseas
partners through traditional means, such as local agents, which resulted
in weaker online marketing capabilities.
Mistake 1：Insufficient distribution channels
An OPPO mobile phone, which is one of the Chinese
mobile phone brands that went overseas relatively early.
• Many companies tap into the online marketing
environment and boost online sales at a relatively
low cost through cross-border e-commerce
platforms such as Amazon or eBay.
• However, this approach is neglects the
development of trustworthy distribution channels.
Overseas consumers want to buy products but
cannot find a reliable source because they prefer
official channels, such as brand websites.
Weak Online Marketing at the Early Stage
Less Effective Social Media Communication
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Florasis: Distribution channels development didn’t keep up with demand
• In March 2021, Florasis launched on Japanese Amazon
and gained popularity through recommendations from
beauty bloggers. However, distribution channels
development could not keep up with the speed the brand
was going viral on social media like TikTok and YouTube.
There are limited official sites for overseas consumers
to purchase Florasis products, and their Amazon and
AliExpress listings were limited.
• From comments on Instagram, Facebook and Reddit,
people had a tough time finding where to buy the
products, and their inquiries to the brand were met with
silence.
• There was a $120 eyeshadow palette on Amazon, which
is $71 on Aliexpress. Aliexpress, however, is not a
popular choice for buying makeup because its poor
quality and long shipping. The lack of a reliable channel
has caused some interested Western customers to
hesitate.
• The failure to unify the online sale price will easily turn
consumers off the brand. When Florasis set up its own
official website and broadened sales channels, the
overseas sales soared.
Source: Florasis Instagram
Source: Alibaba
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Mistake 2: Not placing enough emphasis on personal privacy
Data security is vulnerable and can produce long-term challenges. Cultural and internet development differences
have amplified the issue of data security.
Chinese companies have always been more relaxed in data collection, storage, and usage. Many companies
excessively collected user information. Chinese users grew more comfortable with sacrificing some privacy for a
more convenient experience.
Mainland China
Data Security Law of the
People’s Republic of China,
Personal Information Protection
Law of the People's Republic of
China
Europe and America
General Data Protection
Regulation,
California Consumer
Privacy Act
Overseas users care more about privacy than
Chinese users, and the data privacy policies
and legal terms in China may not apply to
other countries. This could lead to a lack of
trust in the brand's global reputation if there
are security breaches in other countries.
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Domestic companies are slack in data security
Overseas consumers place a higher value on
personal privacy

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Anker: Leaking users’ privacy
Source: Eufy official website
Source: Youtube
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Eufy's claims of having superior data privacy and
security measures have been challenged by the public.
The reality seems to contradict Eufy’s slogans "keep
privacy in your own hands" and “we take every measure
to protect the privacy and locality of users’ data."
Privacy breaches have led influencers to terminate their
partnerships with Anker, while the media has called for a
halt to the promotion of Anker's products.
IT firms such as Anker
have tried to sidestep
industry-standard technical
problems while expanding
abroad to maintain their
brand image, but this may
lead to future issues.
The Verge reported that Eufy's security
camera app allows anyone accessing
other users' personal information and
videos without permission. The Eufy
camera also transmits unencrypted data
to the cloud, making it easy to determine
the camera's location using the serial
number and a BASE64 encoded address.

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Overseas consumers may view
Chinese brands as lacking
originality as Chinese brands
often lack copyright awareness.
Differences on cross--border
legal proceedings make rights
protection even more difficult.
Chinese brands going abroad must
watch out for copyright
infringement and be careful with
imitation and plagiarism.
Chinese brands expanding overseas
should prioritize originality, enhance
their ability to innovate in design and
technology, avoid potentially
plagiarized designs, and respect local
customs.
Chinese brands can enhance their
brand influence and protect the
national image by creating original
products that transform "made in
China" to "created in China".
Mistake 3: Plagiarism
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SHEIN: Lowering costs through plagiarism and replication
Source: Twitter
Designer Mariama Diallo made a
statement on social media
accusing SHEIN of plagiarizing
her dress design and questioning,
"How am I supposed to keep up?"
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SHEIN has also faced criticism for its
lack of sustainability. While the
company claims to use recycled
fabrics, only 64 out of 52,000 dresses
on its website are made with recycled
polyester. These options start at a
price of $4, significantly lower than
typical sustainable brands which
usually sell for over $50.
• SHEIN is a B2C cross-border e-commerce company using its own website
to reach the US, European, Australian, and many other markets. With an
average product price of $10.70, low price is a key factor for its rapid
popularity.
• However, low prices come with challenges in design plagiarism and
quality, resulting in a brand image of cheap disposable clothing.
• While the European and American markets value copyright awareness,
SHEIN relies on the demographic dividend of developing countries and
has been seen as a disruptor in the fast fashion industry. To reduce costs
and shorten the production cycle, SHEIN uses big data to determine what
to produce next, which often results in copying popular design by other
brands or even small designers.

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Mistake 4: Slow after-sales service
Requirements for Chinese Brands Going Global
✓ Forming a local customer service and maintenance
team that is proficient in foreign languages and
respond quickly.
✓ In terms of returns and exchanges, there should be
up-to-date requirements for the brand's warehousing
and order processing capabilities.
Take Amazon as an example:
✓ The after-sales service section is clear.
✓ Each after-sales service has detailed video and text
introductions.
✓ Some after-sales issues can be resolved directly through
customer service navigation without human assistance.
✓ Amazon has three types of contact methods: phone,
online chat, and email.
How Do Overseas Brands Do After-sales Service
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• After-sales service is the final and critical step in order
fulfillment and building reputation. However, many
brands rushing to gain traffic often neglect the
development of their after-sales service.
• In overseas markets, consumers are more aware of
protecting their rights. In the case of similar products
with similar quality and performance, consumers are
more inclined to choose brands with better after-sales
service.

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Temu: Strong promotion, weak after-sales service
Temu has a poor
reputation, with a
consumer rating of only
1.59/5 on “Better
Business Bureau” platform.
Consumers’ feedback has
highlighted issues such as
undelivered packages,
mysterious fees, incorrect
orders, and unresponsive
customer service.
Partnership
Temu chose J&T One Packet
as the third-party delivery
service provider. However,
since J&T One Packet is also
a beginner to the western
market, it does not have
enough post offices. Facing
the short-term explosive
orders, J&T One Packet met
storage and transportation
challenges.
Talents Team
From Temu's official careers
page, Temu is currently
seeking talents in three
areas: customer service,
influencer marketing, and
senior bank cooperation
managers. The high amount
of payment and after-sales
service issues tell us the
company has not yet
established a customer
service team.
Temu is a cross-border e-commerce platform by Pinduoduo. Its brand name
means “Team Up, Price Down”, indicating that the more people buy, the
lower the price. The platform is currently targeting the North American and
African markets. In the second half of 2022, when consumers were deeply
affected by inflation and economic recession, Temu gained popularity by
providing low-priced products and rewarding users with free products.
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Mistake 5: Not adapting market position to fit foreign markets
Brand’s market position shapes the brand
image, which will impact their purchasing
intentions and loyalty.
1 Over Positioning
When implementing a
differentiation strategy, brands
often overemphasize a particular
aspect of their image, sacrificing
a portion of the market. For
example, when Chinese brands
expand into international
markets, they may heavily
emphasize cost-effectiveness,
which can create the impression
of low quality among overseas
consumers.
When expanding into international markets, many brands simply duplicate
their successful position from China rather than creating a new one,
making it difficult for to stand out in overseas markets.
Reasons for positioning failure：
• Cannot adapt their China strategy to foreign markets
• Lacking professional overseas team
Duplicating the brand positioning that worked in China
2 Under Positioning
The brand has not left a clear
image in the minds of
consumers. This is mainly
reflected in the failure to distill
the core values of the brand and
product, which leads to
lackluster marketing activities.
This requires the brand to
conduct thorough market and
creative research before
launching the brand and product
to ensure a strong positioning.
3 Confused Positioning
The brand is not consistent enough
in conveying its positioning, which
makes it difficult to persuade
consumers. For example, plant-
based meat products are very
popular in overseas markets, and
many domestic brands have also
joined the race to launch products,
but they have not considered
contradiction between “meat” and
“plant” are not convincing to
mainstream consumers.
4 Double Positioning
Correcting the brand
positioning can help the brand
to adapt to changes in the
consumer market and
overcome growth challenges.
However, if the brand
frequently adjusts its
positioning or provides
conflicting benefits, this can
make consumers skeptical
about what the brand can
actually offers.
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Miniso: Suffers from an inauthentic, unclear brand position
Source: Quora
Miniso is a Chinese lifestyle retailer that specializes in low-
cost and Japanese-style. In overseas markets, Miniso has
basically not changed its brand positioning, which creates
unclear positioning.
1 Over & Double Positioning
The brand's Japanese-style design has caused some overseas
Chinese consumers to feel aversion, and also created confusion
for overseas consumers who are familiar with Chinese and
Japanese culture. In August 2022, Miniso sparked controversy on
its official Instagram account in Spain by selling a Disney doll
dressed in a qipao and calling it a "Japanese geisha," which
angered both Chinese and overseas customers who voiced their
opposition in the comments section.
2 Under Positioning
Miniso relies on collaborations with famous intellectual
properties, but lacks its own original IP. According to some
comments on Quora, some consumers have a very vague
understanding of Miniso's positioning, and even think it is an
official Marvel merchandise store.
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Mistake 6: Shortsighted trademark name
As more and more domestic brands visibly
reach success in the international market,
like Li-Ning through its debut at international
fashion week and ANTA's acquisition of Fila,
it brings more opportunities for Chinese
companies that want to try going global. At
the same time, it also exposes some
problems caused by cultural differences.
Brand names may infringe on others' prior rights. It
happens when a company fails to investigate whether
there are local brands (trademarks) in the target
market that are identical or disputed with their own
brand before entrance. Using a disputed brand
without permission to enter the target market not
only requires a change in brand name, resulting in the
loss of marketing, but can also lead to legal troubles.
Source: FashionCQ
An uncreative or overly
complicated name can fail to
leave a lasting impression on
people, making it harder to
market overseas.
Chinese brands should pay attention to
linguistic ambiguity in their brand names.
Due to different cultural backgrounds and
interpretation differences, the same name
may have negative connotations. For
example, the Nokia Lumia smartphone is fine
in English, but in Spanish, "Lumia" means
“Prostitute".
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An example of linguistic ambiguity

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Snow Beer & Sulwhasoo: Use the same trademark with an existing brand
Snow Beer, a brand under China Resources Group,
wanted to use the "Snow“ trademark to enter the
Korean market, but Sulwhasoo had prior rights to
the "Snow" trademark. Sulwhasoo is a popular
brand in Korea and its owner, Amorepacific,
registered the "Snow" trademark for cosmetics, as
well as beer, beverages, and juice.
Source: Aju Business Daily
Source: SuperX Press Conference in
Korea
• China Resources Group commissioned a law firm in South Korea
to request the cancellation of Amorepacific's "Snow" trademark in
the beer category. The reason is that although Amorepacific
registered the trademark, it does not sell related drink products.
The two parties failed to reach a consensus.
• In 2019, China Resources Group first launched "SuperX" as the
trademark to entry into the Korean market. Due to trademark
issues, SuperX did not meet sales expectations and production
had to be suspended. The issue was resolved in 2021 when
Amorepacific allowed China Resources Group to sell Snow Beer
with its trademark in South Korea.
Snow Beer‘s trademark is not
very distinctive, so it is
inevitable that the lack of
brand uniqueness may lead
to conflicts with local brands
when entering foreign
markets.
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Legal Dispute

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Geely: Car series name too similar to a local car brand
In 2017, the Chinese automaker Geely introduced a
premium car series called LYNK&CO in the US.
However, the name sparked controversy because the
pronunciation of LYNK&CO is very similar to the
famous luxury car brand, Lincoln. Ford, the automaker
behind Lincoln, objected to Geely's application for the
LYNK&CO trademark in the US.
Lincoln believes that although the two brand names are
different in writing, their similar pronunciations may cause
confusion among consumers. Its spokesperson stated, "The
Lincoln has a century of history, and we hope to protect its
reputation. Regarding Lynk & Co's infringement of Lincoln's
trademark rights, Ford will take all legal measures to
prevent the use."
Source: 旁眼观车
Naming is important for Chinese brands when going
global. In selecting brand names and logos, thorough
research should be conducted to consider the
potential for trademark conflicts.
The picture on the left is a LYNK&CO, and the picture on the right is LINCOLN.
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Mistake 7: Cultural appropriation and following stereotypes
Cultural appropriation: the borrowing of
cultural resources from other ethnic
groups without giving them credit and
respect, thereby influencing the local
culture.
Differences between Chinese and
Westerners goes far beyond dietary
habits and etiquette, it is also about
values, and one value of many western
countries is embracing diversity.
Understanding this is necessary to go
global.
Some brands going abroad have not
deeply understood the cultural
backgrounds. Their products or their
marketing strategies have offended local
consumers, thus damaging their
reputation.
Cultural stereotypes: Occur when a
group is categorized with the same traits,
such as foreigners believing all Chinese
are good at math or some Chinese
believing all Americans love fast food.
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Genshin Impact: Character design lacked diversity & stereotyped
Genshin Impact, an action role-playing game developed by miHoYo,
has gained remarkable success in the overseas market. Its high-
standard game graphics have attracted players in the mature
gaming market abroad. Despite having a strong IP and loyal fan
base, Genshin Impact has encountered issues of cultural
appropriation and perpetuating cultural stereotypes.
On August 2022, the popular role-playing
game Genshin Impact released its 3.0
update, featuring a new region named
“Sumeru”. Sumeru based entirely on
“orientalist” stereotype. “Orientalism” is
the imitation or depiction of aspects in the
Eastern world. These depictions are
usually done by writers, designers, and
artists from the Western world .
A user on Twitter compared Genshin
Impact with other similar games and
found that Genshin Impact’s skin tone
options lack diversity. The post has
received 8,213 retweets.
Almost all of the new characters to
have pale skin. The only two characters
with darker skin in the game are
described as “exotic” or “scary”.
The voice actor and actress were
directed to pronounce the character’s
Arabic name incorrectly since the
developers said that the original
pronunciation would be too difficult for
Western fans
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Mistake 8: Not working with local IP or creating new local IP
• As the carrier of the brand, IP originates from content and is higher than
content. It is the link between content and consumer emotion.
• Consumers in different countries and regions vary greatly in terms of
consumption habits and opinions. Therefore, on the basis of the global
layout, brands should continue to expand its business territory through
localization operations, absorb elements of interest from all over the world,
and provide inspiration for product design.
• If a domestic brand wants to expand overseas, IP must go first, because IP
stands for the brand.
• While adjusting IP for the local market, it’s essential to communicate
efficiently with consumers. In the process of collecting data of user
acquisition, user activation, user retention, revenue acquisition, and
recommendation dissemination, brands should convey products’ functional
value as well as emotional value , thereby creating an emotional connection.
• Brands that went overseas in the early days often ignored this point. They
were too eager to occupy market share while underestimated the
construction and localization of brand stories. As a result, they could not
occupy the hearts of overseas consumers in the long run.
Brand story and emotional value
Barriers for domestic IP going overseas
When a brand goes
global, it needs to
tell both the
Chinese story and
the international
story, and share
both the product
story and the
brand vision.
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POP MART: The international expansion of IP requires new creations
POP MART, a Chinese blind box toy manufacturer, pioneered the
blind box business model in China. In 2018, POP MART launched its
international expansion plan in South Korea and has since entered
more than 23 countries and regions. In addition to opening physical
stores, POP MART also launched an overseas version of its official
website in 2020 to cater to overseas customers.
POP MART once released the core
IP – Labubu and Tycoco in both the
Mexican and European markets.
Tycoco, a skull character, was very
popular in Mexico as skulls signify
“rebirth”, while in Europe some
consumers were less interested in
the product due to its creepy
appearance.
The regional authorization of IP
Until now POP MART has not crafted
any derivative content for its huge IP
families. Customers like Popmart
because the beautiful design and the
excitement of unwrapping the blind
box process, but beyond the element
of surprise, POP MART needs stories
to enter the mature oversea markets.
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Regional cultural differences
Business models that have been
successful in China are not
applicable to the mature toy markets
like the US and Japan where many
IP are legally registered, hence some
toys released in China cannot be
published in these markets.
Weak IP development

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The “buying traffic" model sacrifices
the quality of products and services,
making transformation a necessary
trend for Chinese companies that
have gone global in recent years.
Brands often seek to replicate the
success of others, but this often
leads to mistakes, such as viewing
their brand as simply a matter of
generating awareness through
advertising or dominating the market
by buying traffic.
By 2016, as the internet became more
regulated and cross-border expansion
exploded, competition among brands
also increased in a wide range of
markets. Users’ expectations of
products and services raised,
revealing the limitations of short-term-
focused development.
Winning the favor of overseas users
through excellent quality is more
advantageous for a company's long-
term development than occupying
market share in the short term.
Building a brand, enhancing reputation,
and diversifying development have
become new paths for going global.
Mistake 9: Sacrificing long-term benefits for immediate traffic
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Kwai: Struggling in the fallacy of "Traffic First"
• Kuaishou's overseas strategy is simple: invest heavily in
advertising. In South Korea, they attracted traffic by inviting
celebrities so their short-term performance was impressive.
However, user retention and the number of daily active users
diminished.
• Kuaishou made its third attempt to enter the international market
with the launch of SnackVideo in India in April 2020, followed by
Zynn in North America a month later. However, Google Play took
down Kuaishou for violating developer platform principles, Zynn
re-launched shortly after but lost appeal after the initial cash
reward for joining.
Newly registered users on Zynn can enjoy
cashback rewards.
Get cashback by inviting friends to download or
interact within the Zynn.
• Kuaishou copied their Chinese advertising strategy to
run Zynn, offering a $20 reward for signing up and
inviting new users. Additional rewards were given for
inviting more than 5 people.
• However, Kuaishou's approach of relying solely on cash
handouts for international expansion is not effective
without a clear business objective. In contrast, TikTok
has a clear strategy of "technology for expansion,
localized operation" and focuses on content operations
to attract genuinely interested users instead of relying
on small financial incentives.
The media defined Zynn
as a pyramid scheme,
and statistics showed
that the only reason 90%
of users downloaded
Zynn was to make
money. ---Leiphone.com
The apps Zynn and TikTok dominate the North
American App Store rankings.
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Mistake 10: Launching a product overseas rather than a brand
The shortened time from the
second to the third stage reflects
the transformation of Chinese
companies going abroad, which
rapidly shifted from product to
brand going oversea.
In a weak or average economy, a
successful brand can help companies
maintain resilience through higher
customer loyalty, and have a stronger
voice in the market, as consumers tend
to choose familiar and trustworthy
brands.
The Value of Developing Brands
Chinese companies going abroad can be
divided into three stages of development:
1. From 2005 to 2020: the stage of products
going abroad dominated by traditional cross-
border e-commerce.
2. Starting in 2020: in addition to the
traditional cross-border e-commerce, boutique
cross-border DTC e-commerce appeared.
3. Starting in 2022: new consumer brands and
cross-border DTC e-commerce enter the
market. The channels became more extensive,
including online and offline channels with
independent websites as the main platform.
A brand is unlikely to help itself achieve
success without a story, accumulated brand
value, and well-rounded brand image.
Increase revenue
Develop resilience
In a strong economy, companies that
achieve success through brand
building can gain more market share
and premium pricing, increasing
revenue.
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Casetify: Became the go-to for customized phone cases
• Casetify collaborates with various IPs and artists from around the
world to co-create products, such as Harry Potter, Pirates of the
Caribbean, Stranger Things, BLACKPINK, and Olivia Rodrigo.
• North American consumers value quality of phone cases, which must
be durable enough to withstand drops. Casetify's phone cases can
withstand 6.6-foot drop tests while remaining lightweight.
• By leveraging KOLs and celebrities for online promotion, Casetify has
gained higher exposure. Casetify has famous fans such as Dua Lipa,
Gigi Hadid, and numerous Japanese and Korean celebrities.
The original brand name of Casetify, which earned US
$120 million in revenue, was Casetagram ("case" +
"Instagram“) and let consumers customize phone cases
with their Instagram photos. With this customization
strategy, Casetify established its uniqueness and
captured customers' desire for self-expression. Casetify
focused on branding rather than sales alone, making it
to stand out in the electronic accessory market.
Collaboration with Blackpink Collaboration with Olivia Rodrigo
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Casetify expresses concern for social issues through #CasetifyCares
and donates a portion of its profits to specific communities.

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dx@daxueconsulting.com +86 (21) 5386 0380
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ONLINE SALES DATA SCRAPING
社媒聆听
UX/UI TESTING
用户界面测试
STORE CHECKS
店访
ONLINE COMMUNITY
线上社群调研
MARKET INSIDERS INTERVIEW
专家访谈
CENTRAL LOCATION TESTING
食材品鉴

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We use modern tools & software to stay ahead
A selection of tools leveraged by us for our clients
Search engine &
e-commerce analytics
搜索引擎&电商分析
Social listening
社媒聆听
Data mining / survey
analysis
数据挖掘&问卷分析
Website / app traffic
comparison
网站/应用流量比较
Diary study &
community research
日记&社群调研

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An experienced organization with the Asian market
Regularly featured and quoted in publications all over the world
DAXUE ON THOUGHTFUL CHINA
LECTURING AT PEKING
UNIVERSITY MBA.
WORKSHOP ON CHINA’S FOOD
IMPORTS
TV INTERVIEWS ON PRIME TIME TELEVISION IN SINGAPORE
FREQUENT SPEAKERS ON BUSINESS
TOPICS

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Our testimonials
Comments from our clients
Director Ecommerce
Marketing EMEA @ Ubisoft
“Thank you for your answer. I’ve been through the presentation and I’m very impressed by all the useful detailed information I’ve
found. Thank you so much!”
JAPAC Revenue Strategy
Manager @ Twitter
“Thanks so much for your hard work over the last several months and the multitude of presentations that you have done to [our]
stakeholders. I highly appreciate the quality of work and also the patience with which you have answered the questions.
Overall the work has been very well received and has been very educational for our teams in Singapore, New York and San
Francisco. We will be using a lot of this information as we make critical investment decisions into China over the next several
months.
Please do pass on our thanks to the entire Daxue team - hope you do take a moment with the entire team to celebrate the success and
outcome of this project! Also, I would be happy for you to use my reference for any future clients.”
VP of Innovation @ prestige
skincare brand - US
“Thank you very much for your time and performance yesterday. The team in New York and all of us appreciated a lot your
presentation and the quality of the consulting from Daxue Consulting.”
E-commerce Manager
@ L'Oréal
“I come back to you to thank you and your team for the work done on the project, it was a real pleasure to work together ☺ The brand
was very satisfied with the insights, especially with the richness brough by the local Chinese specificities.”

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