With the continuous increase in China’s industrial production capacity, the enrichment of the industrial chain, and ongoing international trade frictions, against the backdrop of a slowing domestic market, going global may have become a compulsory course for construction machinery manufacturers.
Customs data from 2023 in China shows that the export of construction machinery reached as high as 48.5 billion US dollars, whereas in 2020 it was 21 billion US dollars.
The paths for Chinese construction machinery companies going global mainly consist of two types of enterprises. The first type includes large manufacturers such as Sany, XCMG, and Zoomlion, while the second type is made up of numerous small and medium-sized enterprises. Depending on the scale of the enterprise, the paths for going global vary.
In recent years, the three major Chinese construction machinery giants, XCMG, SANY, and Zoomlion, have coincidentally shifted their focus to overseas markets. In 2023, amid an overall decline in business, their overseas performance has seen double-digit growth, with the proportion of overseas business in their overall operations increasing by over 10%. Sany’s overseas performance has exceeded domestic sales, while the overseas business of the other two companies accounts for around 40%. Their paths to going global encompass three stages:
First stage: Sales-centric approach: Domestic exports—Establishment of overseas offices—Formation of overseas sales companies—Local distribution teams.
Second stage: Local production realization: Acquisition of local factories/establishment of new factories—Establishment of research and development centers.
Third stage: Launching financial business. In 2020, XCMG established a bank in Brazil, and in 2024, Sany issued Global Depository Receipts (GDRs) overseas and listed on the Swiss Stock Exchange.
In the Online B2B business field, although these large manufacturers are also involved, their development is slow, with the companies still focusing on overseas operations. However, their domestic dealers are actively competing for the overseas market through e-commerce platforms.
For small and medium-sized construction machinery enterprises, lacking strong capital support makes it difficult for them to establish sales offices overseas and even more challenging to build factories abroad. The typical path for these enterprises going global involves participation in exhibitions, engaging overseas distributors, and laying out online B2B business strategies.
To carve out a share of the overseas market, small and medium-sized enterprises frequently participate in domestic and international exhibitions, such as China’s Canton Fair and overseas construction machinery exhibitions. They expand their overseas distribution networks through various channels, and young manufacturers also establish international trade teams dedicated to managing online B2B businesses, achieving sales through cross-border platforms. However, they rely more on professional international trade companies because of the limitations imposed by their scale, making it challenging to simultaneously drive production and international trade.
From the export data perspective, Chinese construction machinery almost holds 25% of the global market share, with the world increasingly recognizing “Made in China.” For developing countries seeking cost-effective solutions, the construction machinery from small and medium-sized enterprises is more suitable for them because, besides lacking brand premiums, they also highly value hard-earned overseas customers.