Erik on product management and such
Deep dive: How Chinese brands go global
If you look at the data in the graphic below and see that more than 70% of products sold on Amazon originate from China you may draw the conclusion that Chinese companies have cracked the code on how to expand into the global market. The reality is in fact the opposite.
Successfully growing globally is a challenge that almost no organization in China is capable of, outside of competing with lower prices across various e-commerce platforms that treat their products as commodities. Almost everyone selling on Amazon see the platform dependency as a problem to be solved, and low prices that result from a lack of pricing power a threat to their business.
Even established giants like Alibaba, Tencent, and ByteDance are incapable of building a successful global business. This may seem to contradict reality, but the reality is that since Alibaba acquired Lazada in 2016, and as they have increasingly integrated Lazada with the Alibaba team in Hangzhou, their market share in SEA has increasingly declined.
Tencent’s international business is growing steadily, but that is because they, unlike Alibaba, take a hands off approach to the international companies they acquire and let them operate with great independence.
ByteDance has of course been very successful with TikTok, but ByteDance did not build TikTok; they acquired Musical.ly and its 240M userbase and renamed the application. Their failures since then outweigh their successes, with e-commerce as the best example.
TikTok Shop first launched in the UK in 2021. Now, in 2025, they have launched a Beta version of TikTok Shop in the UK? Why, and what happened to the in the years since 2021? A complete failure in building a UK team, unsatisfied sellers in both UK and China that felt bullied and mistreated by TikTok. TikTok Shop US is equally unsuccessful, and the entire US team has been replaced multiple times.
In Indonesia, ByteDance acquired Tokopedia, with the result being that “Tokopedia sellers report revenue drops and algorithmic sidelining after integration with TikTok. Many sellers are leaving the platform, saying its core strengths have eroded since the merger.”
The reasons behind these failures are all organizational. In this essay I will introduce the different stages a growing Chinese organization must go through, from generating sales by competing on price to becoming a brand that is respected and sought after for its performance and ownership experience. I will do so by introducing what I call the new customer acquisition equation and its diverse set of factors, the Y-threshhold for potential customers, and exemplarize by brands at different stages in global development.
The organizational factors that enable the companies to go through these stages will be the topic for a future essay.
Stages of global expansion