Retooling for sustained business growth

Multinationals change tack to keep expansion going

Buoyed by the huge growth opportunities, a growing number of multinational firms are moving away from other global markets and focusing on Chinese consumers, said a leading management expert.

Terence Tsai, associate professor of management at China China-Europe International Business School in Shanghai, said despite the slower growth rate, China's growth credentials are still more impressive than most of the Western countries.

"When they (multinationals) look at the Chinese market and the way Chinese people spend money, they know that China is ready for the big league," said Tsai, who specializes in multinational management and globalization strategies.

Citing the example of multinational conglomerate 3M Corp that is known for its innovation and range of products that cater to various segments of the domestic market in China, Tsai said that it is only logical that the company expands into the retail segment.

Yet another interesting aspect that showcases China's growing prowess is the number of research and development centers that companies are setting up in the country.

"It is obvious that their focuses are to meet the needs of the local market. The trend will become a norm for the future," said Tsai.

"It is happening not only for luxury brands. Even the small-and-medium-sized Chinese companies are shifting their exports businesses and searching for growth options in the domestic market," he said.