Although the size of China's specialty chemicals market has almost doubled in the past decade, few international specialty chemical companies have been able to achieve growth and profitability in this market. Foreign companies in the industry are facing major setbacks in China's growth and market share. Our market research experts believe that the profit structure of MNCs in China's specialty chemicals market is lower than that in other regions, which also shows the huge difference between leaders and laggards. The highly dispersed specialty chemicals market in the region is dominated by overcapacity and fierce competition. While some argue that falling margins are part of their global strategy to seize growth opportunities in China and build long-term business in China, there are clear signs that international companies are failing to keep pace with market growth.
In view of the steady growth of China's specialty chemical market, the international specialty chemical companies operating in China must rethink their existing operation modes and strategies to avoid backwardness.
The poor performance of international specialty chemical companies in China is caused by many factors. These include:
Not enough adjustments have been made to the Chinese market and products provided by Chinese competitors
Western companies have limited access to key potential customers (state-owned enterprises in second and third tier cities and fast-growing private institutions).
Lack of in-depth market insight, lack of relationship building ability, lack of entrepreneurial Chinese top talents in key positions of the company
More and more Chinese local competitors can provide products and participate in the competition of high-end market segments
The low capital expenditure rate of private entrepreneurs shows their ability to make aggressive investments
Chinese competitors quickly adopt Western technology - expertise and technology - to make it easier for them to offer highly competitive products
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