Internationalization choices of Italian enterprises: competing in Chinese functional goods market

Abstract

Asian emerging countries are changing the way the world does business. As the history taught us, the world economy is constantly moving toward new directions and new challenges and opportunities are open. In order to survive in a chaotic and uncertain environment, companies have to be able to "ride the wave", following the rules dictated by the economy.

Today, at a time when developed countries face slower economic growth and market saturation, Asian continent is radically changing its economic and social structure. Their economies are changing the past rules, becoming not just places for lower production costs but places to sell Western goods. Their fast-growing cities are filled with millions increasingly prosperous consumers, who are providing a new growth market for global corporations. In this context, China is becoming a good opportunity for a large number of Italian SMEs. All the opportunities it can offer can be expressed by an ancient Chinese proverb: "The vase worth what it can contain". China represents an important potential market for manufactured goods and services and it is becoming attractive for Western businesses for a huge variety of industries, thanks to its size in terms of population, land and the emergent generation of middle class people. In the first chapter, starting from an overview of the main drivers of economic development (the role of government and the main changes are affecting Chinese society), we will analyze the main opportunities for Italian companies, focusing on their internationalization choices and why Chinese consumer buys made in Italy products. In the second chapter, we will focus our analysis on the purchasing behavior and consumption pattern of durable goods in China. In the third chapter we will present our analysis related to the functional goods market in China, focusing on the laundry care industry. We will analyze point of force and weaknesses of Italian companies operating in functional goods market and if they can success in Chinese market.