Collective internationalization – a new take off route for SMEs from China

Abstract

Purpose

The purpose of this paper is to investigate the establishments of Chinese wholesale and retail market platforms in China and Europe, which create a new take-off route for SMEs from China, and to theorize on this as a new collective route to internationalization.

Design/methodology/approach

An exploratory case study has been undertaken covering four Chinese market platforms: the role model in Yiwu, China, and the establishments in Warsaw, Poland; Budapest, Hungary; and Kalmar, Sweden.

Findings

A new collective internationalization route is identified, driven by the collectivistic Chinese culture. Here Chinese SMEs diverge from traditionally suggested paths of internationalization, taking off independently from the domestic business network but form a joint market platform in the foreign market. This collective behavior compensates for the resource constraints of internationally inexperienced Chinese SMEs. From the market platform, they plug into the local market network and are provided with economies of scale and scope, ultimately making them internationally competitive. This collective route offers the potential for joint learning and risk reduction when entering distant markets in the early internationalization stages.

Research limitations/implications

For Chinese SMEs, co-location in a market platform in foreign market offers the advantages of lowering institutional distance and uncertainty as the firms collectively handle these matters. A limitation of the study concerns the generalizability, as few cases are studied. Still, being an unstudied phenomena there are important empirical contributions to be made.

Originality/value

The paper reports on an overlooked empirical phenomenon, namely the establishment of Chinese wholesale and retail market platforms in China and Europe. Through this establishment a new collective route into the global market by Chinese SMEs is identified and theorized.

Citation

Sandberg, S. and Jansson, H. (2014), "Collective internationalization – a new take off route for SMEs from China", Journal of Asia Business Studies, Vol. 8 No. 1, pp. 29-42. https://doi.org/10.1108/JABS-09-2012-0043