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“Considering the fact that China’s specialty chemical market is witnessing steady growth, international specialty chemical companies operating in China must rethink their existing approach and strategies to avoid getting left behind,” says a market research analyst at Infiniti Research.
Even though China’s specialty chemical market has nearly doubled in size over the last decade, not many international specialty chemical companies have been successful in fulfilling their growth and profitability aspirations from this market. Foreign companies in the sector are facing major setbacks in terms of growth and market share in China. Our market research experts suggest that margins in specialty chemicals in China market for international companies are structurally lower than in other regions and also show wide variance between leaders and laggards. The highly fragmented specialty chemicals market in the region is dominated by overcapacity and intense competition. Although some argue that the lower margins are a part of their global strategy to capture growth in China and establish a long-term presence in the country, there are evident signs that international companies are failing to keep up with the market’s growth.
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Experts at Infiniti Research has listed below some steps that companies must consider making a part of their approach:
Build market and segment level insights: Specialty chemical companies must take into consideration China’s growth trajectory while evaluating specific segments for its growth potential in the country. Experts at Infiniti Research suggest that specialty chemical companies must consider adopting a granular approach that considers regional differences when assessing various specialty-chemical segments. Careful assessment of second and third-tier cities may also show signs of higher growth potential in the years to come.
Develop products tailored to the Chinese market: Designing products to meet the demands of Chinese customers at competitive price points is crucial to success for international specialty chemical companies in the long run. Providing more sophisticated products to Chinese customers would be crucial as local competitors are increasingly adopting western technologies to develop new and improved products. Specialty chemical companies must provide their local teams in China with maximum resource support and operational authority to launch products that are tailored to Chinese consumers.
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Established in 2003, Infiniti Research is a leading market intelligence company providing smart solutions to address your business challenges. Infiniti Research studies markets in more than 100 countries to help analyze competitive activity, see beyond market disruptions, and develop intelligent business strategies. To know more, visit: https://www.infinitiresearch.com/about-us.