Although China’s specialty chemicals market has almost doubled in the past decade, few international specialty chemicals companies have been able to achieve their growth and profitability in this market. In China, foreign companies in the industry are facing major setbacks in terms of growth and market share. Our market research experts believe that the profit structure of special chemicals of multinational companies in China market is lower than that of other regions, and there is also a big difference between the leader and the laggard. The highly dispersed specialty chemicals market in the region is dominated by overcapacity and fierce competition. While some believe that falling margins are part of their global strategy to capture Chinese growth and build long-term business in China, there are clear signs that multinationals are failing to keep up with the growth of the Chinese market.
Considering that China’s specialty chemicals market is growing steadily, international specialty chemicals companies operating in China must rethink their existing methods and strategies to avoid falling behind.
Identify problem areas for Specialty Chemicals Companies in China
The lack of performance of international specialty chemical companies in China is caused by many factors. These include:
For the lack of product customization in the Chinese market, as well as the counterattack of Chinese competitors
It’s hard for Western companies to reach important potential customers (state-owned enterprises and fast-growing private institutions in second and third tier cities)
Lack of in-depth market insight, lack of the ability to build relationships, the company’s key positions in the business of China’s top talent less
More and more local Chinese competitors can provide products and participate in high-end market competition
The enterprising private entrepreneurs show the ability to invest with low capital expenditure rate, high efficiency and entrepreneur incentive structure
Chinese competitors are rapidly adopting Western know-how and technology to make it easier for them to provide highly competitive products
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