How China's new generation of companies can embrace global opportunities

China's private companies contribute 60% of the country's gross domestic product (GDP), 70% of technological innovation, 80% of urban jobs and 90% of the total number of enterprises. Most of these are family-owned and their numbers have grown so quickly that they now account for 67% of the companies listed on the Shanghai and Shenzhen stock exchanges.

Over the next decade, Chinese boardrooms will begin to look much younger. This trend will encompass both China's international giants and its small and medium-sized local businesses, impacting industries from beverages and snacks to fashion.

Founders of these companies, who are in their 60s to 70s, are getting ready to hand over the reins to a new generation.

This rise of the new generation running China's enterprises is driving several key trends:

Back in the 1970s and 1980s, many cash-strapped entrepreneurs were forced to rely on imitation. However, the new generation recognizes that copycatting is a dead-end model. Instead, they are shifting the focus toward innovation, driven by competition, technological ambition and global market aspirations.

Many of them are investing in research and development, design and intellectual property, positioning their companies not just to follow, but to lead. For example, some emerging lifestyle brands have moved beyond replication to focus on branding, aesthetics and product differentiation, targeting both domestic and international consumers.

Many first-generation entrepreneurs in China succeeded through grit, experience and keen market intuition. Without an MBA education or a professional team to fall back on, entrepreneurs trusted their instincts when making key decisions.

The new generation, however, is professionally trained, globally educated and deeply familiar with modern business methodologies. They are adopting a strategic, data-driven and objective approach – akin to institutional investors – when making key decisions.

Rather than relying on intuition alone, they leverage market research, financial modelling and structured advisory to chart their course. A case in point is a beverage company whose founders adopted a data-driven approach from day one, rapidly iterating products and branding based on consumer feedback and data.

In an age of scarcity, first-generation entrepreneurs focused on perfection in a particular niche. The new generation, however, grew up in an era of internet giants who have built massive digital ecosystems: vast interconnected networks of e-commerce, logistics, social media and payments.

Companies that build their own ecosystems can offer a wide range of products and services; this also means they can more easily expand up or down the value chain, acquiring other companies or technologies.

By thinking about the entire ecosystem, from farming to food and even retail, companies can simplify the supply chain, spend less, earn more, and expand faster. For example, a snack company has integrated upstream supply chains and downstream retail experiences, creating more seamless, scalable business models.

The rise of a younger, more capable generation is not only transforming China’s domestic landscape but also fuelling ambitions to go global – a strategic imperative for Chinese companies, no matter how the global landscape evolves.

To win globally, they need to adopt a global mindset. Specifically, this can be broken down into several key attributes:

Chinese companies are not just looking to imitate, but to create and lead their own ecosystems. They want to seize every growth opportunity possible and are unfazed by tough competition.

Fuelled by agility, strong insights, and embedding into the local talent market to tap the brightest minds, China's companies could lead a new wave of significant international expansion.