Chinese companies are gaining share in overseas markets without relying solely on low prices. A Goldman Sachs analysis of 40 Chinese and international companies across 11 industries found that Chinese products typically enter new markets priced about 30% below local incumbents. Prices often rise as quality and features improve, while the discount may remain broadly stable. The findings add nuance to debate over whether China’s export growth is driven by price competition.
Trina Chen, Goldman Sachs’ co-head of China equity research, said on the firm’s podcast that the link between Chinese products and falling prices is more complicated than it may appear. Prices can rise after market entry, influenced by inflation, economic cycles and improvements in product quality.
The analysis comes as policymakers in the US and Europe focus on China’s export growth. Weak domestic demand and prolonged deflationary pressure in China have fueled concerns that exporters could bring low-price competition to overseas markets. Goldman Sachs’ findings suggest, however, that prices do not always keep moving lower after products enter a market.
Electric vehicles hold their discount as robot vacuums move upmarket
Chinese electric vehicles are one relatively stable example. Goldman Sachs found that they sell for about 20% less than comparable global models, a gap that has remained broadly unchanged over the past three to four years. Better products, in other words, do not necessarily mean a rapid loss of the original price advantage.
Robot vacuums have followed a different path. Chen said Chinese brands entered the US market at prices about 40% below competing products. After years of innovation and added features, some now sell for roughly 60% more than comparable models. Product upgrades can therefore help brands move from a low-price entry point to a higher-end position.
Chen said Chinese brands do not necessarily keep putting additional downward pressure on local prices for years after entering a market. Price cuts by competitors, she said, often come when they are losing market share and trying to retain customers—not necessarily as an immediate response to a Chinese entrant.
Modular consumer products offer a faster route to market share
Goldman Sachs also found that Chinese companies tend to gain share more quickly in modular, consumer-facing products and in markets that are still growing. Products in these categories are updated frequently, allowing consumers to compare features and prices directly, while brands can enter the market and refresh products with relative flexibility.
Chinese companies have made slower progress in mature, closely connected business-to-business markets. Customer trust, after-sales networks, local distribution and a track record of operating over time all matter when buyers choose suppliers. Those requirements make it harder for new entrants to establish relationships.
The electric vehicle and robot vacuum examples show why Chinese export competitiveness cannot be reduced to price alone: discounts and subsequent pricing differ by product. Features, service capabilities and market structure also shape how Chinese companies gain share overseas.