All multinationals should gain strength from Chinese market: German company CEO
By Gong Hongyu, Zhang Dongfang, Mo Honge
(ECNS)-- “The Chinese market is like the best 'gym' in the world, and I believe all multinational companies should come to the vast arena of China, to demonstrate and enhance their skills,” He Jun, CEO of KSB North Asia region, said in a recent interview with China News Network.
The "In China, for the world" strategy can help multinational enterprises better mitigate risks and challenges posed by anti-globalization, He said.
KSB Shanghai Pump leads the group in digitalization
With a history spanning over 150 years, KSB, the world's leading manufacturer of pumps and valves, has established its “second center” in China, complementing its headquarters in Germany. Upon entering the KSB Shanghai Pump Minhang plant, visitors can see the newly constructed 3D virtual factory in place of the traditional manufacturing model, and digital twin technology integrates virtual and real elements throughout the facility.
Over the past five years, KSB Shanghai Pump has continued to invest in digitalization and has taken the lead in advancing its digitalization strategy by moving fast in small steps. China's digital development is undoubtedly among the fastest in the world, boasting the most extensive and diverse digital application scenarios, He said, adding that KSB Shanghai Pump has proposed numerous digital application concepts that many European companies have not envisioned or that face policy challenges in implementing.
According to him, KSB is now a water machine company that sells both pumps and software. The company has launched a digital software called "Ki-Pump Sentinel," which can detect machine faults in real time by analyzing the vibration frequencies of pumps, motors, gearboxes, and other equipment. Designed not only for KSB products, it can be customized and applied to industrial products from other brands.
KSB Shanghai Pump sold the intellectual property rights of digital products developed in China to its German headquarters for RMB 6 million, which marks a shift in KSB's global operation, he said. “The company, once taking the strategy of digitalization of going from overseas to China, is now contributing back to its European headquarters and the global market with innovations made in China,” he said.
“In China, for the world” strategy reduces risks associated with anti-globalization
Re-expanding into the global market from China involves more than just digital development. He noted that KSB has identified new concepts in green development within China. The company has applied the latest concepts and insights gained from the Chinese market to its product design. Currently, KSB Shanghai Pump has launched four locally produced products in China, which have now also been recommended by the headquarters to Europe and other global markets.
“Unlike in 1992, when I started working for multinational enterprises in China, many Chinese enterprises have grown mature in recent years and they are now able to complement their strengths with those of their multinational peers and make progress together,” He said. In his view, Chinese companies are more sensitive to the market and perform better in execution, which is worth learning from foreign companies.
As the Chinese market rapidly develops, KSB's headquarters is paying increasing attention to this region. To enhance its growth in China, the headquarters has introduced a new strategy: "In China, for Asia, and the world."
He explained that previously, KSB served the global market based on its headquarters in Germany, but now it considers China as another center that radiates to surrounding countries and regions.
In today's complex and volatile international political and economic landscape, KSB’s new positioning of the Chinese market becomes an important basis for the realization of its global growth goal.
Multinationals should dive into the Chinese market to get strengthened
Since entering the Chinese market, KSB Shanghai Pump has achieved an impressive revenue increase, particularly in the past four years during which its revenue has expanded consecutively. In fiscal year 2023, KSB Shanghai Pump's contribution to the Group's total performance reached 12 percent.
In July 2024, KSB celebrated its 30th anniversary of investing in Shanghai, announcing the launch of its new €20 million (about $21.18 million) chemical engineering pump plant. He said these initiatives reflect KSB's confidence in the Chinese market and a desire to continue rapid growth.
He pointed out that despite some reconsideration of the Chinese market, many German enterprises believe that China will continue to present future opportunities for global development and support the German economy. This will provide enterprises with wide development prospects.
"We had no trouble reaching that consensus. The KSB headquarters and most German enterprises are very supportive of further increasing investment in the Chinese market," He stated.
He compared the Chinese market to the best gym in the world with a variety of equipment, outstanding enterprises, along with numerous customers and operational scenarios. "Fitness lovers are constantly working out at this gym of the Chinese market, a scene that can not be found in lower-tier market environments,” he said.
Achieving success in the Chinese market is essential for foreign enterprises to succeed in the global market, he added.