International companies: a home from home for global brands in China

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Beijing ETOWN is an ideal home from home for an impressive A-list of global brand-name companies that use the hi-tech zone as a base for their China and Asia operations. Executives at GE Healthcare explain why being there gives them a competitive advantage.

When in January GE Healthcare’s new leader John Flannery made his inaugural trip to Asia as global chief executive, there was never any question where his first port of call would be: Beijing ETOWN.

There, at the company’s base on January 15, he met hundreds of employees at a town hall event to discuss GE’s global development strategy as well as its China and Asia growth prospects, after his tour took him on to other Asian cities.

It was a visit that showed the strategic importance of China to GE Healthcare – and the importance of Beijing ETOWN as a long-term base for its operations across Asia.

GE  

GE Healthcare was one of the earliest of the big-name overseas companies to put down roots in Beijing ETOWN, identifying it as an ideal location when the zone was still more commonly known as the Beijing Economic and Technological Development Area (BDA).

"We have a great working relationship with BDA dating back 20 years," says Jeff Sommer, Asia global supply chain general manager, GE Healthcare China. "The employees in the Beijing area are outstanding in terms of technical talent and outstanding with regard to leadership, and all the other skills we would be looking for in terms of growth.

Chen Young, Beijing general manager, adds: "The local government here is very focused on people development and we have been getting a lot of benefits in terms of talent development and we actually have some programmes funded by the government. The BDA government has done a lot and helped our business."

China focus

GE Healthcare China has grown in step with Beijing ETOWN. Today, it is an approximately $2 billion business with 7,000 employees and a 40,000-square-metre factory designing and making products for the local and global market.

"We would like to consider ourselves a Chinese company in China," says Sommer. "In reality we are a multinational company in China, but we are completely self-sufficient."

That localized identity is critical for a global company operating in China, Sommer emphasizes. "It is important for us because it is important for our customers," he says. "The reality is that our Chinese customers want Chinese-made products in the same way that UK customers like buying UK-made products.

"Ultimately we are here for our customers. The percentage of local customers is growing larger and larger. Since we started here six years ago, we expect that to continue to increase."

Reaching out

The increasing emphasis on products designed and made in China for the China market is best illustrated through the development of items aimed at second-tier and third-tier Chinese cities, such as hand-held ultrasound scanners.

"Historically speaking, going back a decade we were importing products that sold well in large hospitals in major cities," says Sommer. "The big focus in the past three to five years has been to try to go out to tier-two and tier-three customers to design products that meet the specifications of different customers."

In the same way that auto companies make different classes of car for different markets within one country, GE Medical produces a variety of different products with the same core functionality for different segments of the market.

"The biggest example is a handheld ultrasound device monitor so that a doctor doesn’t need the infrastructure of a hospital or the infrastructure even of a clinic because is a handheld device," says Sommer. "That product was designed in China for China."

Loyalty bonus

GE Healthcare’s growth mirrors the increasing importance of and investment in healthcare across China as the country becomes wealthier, with a booming middle class seeking an increasingly sophisticated level of medical support.

It is a sector that demands constant upgrading of technology and ever better products to compete in the healthcare field – and that means hiring and retaining the best people available.

GE in Etown  
That means offering good remuneration with the support of local government incentives, but Sommer says there was another ingredient in GE Healthcare’s field of work that helped. "I believe that when you are making healthcare products, you are proud of what you do," he says. "People here make products that save people’s lives.

"When your mother, father or son or daughter go to a hospital and see they are using the equipment that is made in this factory, it makes a difference. Before the Christmas holiday, there was an employee whose father was in an ICU unit and he sent me a note to say how proud he was that the CT machine his father was diagnosed with was something that he actually made in the factory in BDA.

"That builds real pride. We have a great leadership which, with the exception of myself and one or two other people is completely local and understands what it takes to continue to attract and retain people."

Future growth

Like many international companies, GE Healthcare – which is enjoying double digit growth each year – sees strong potential to grow and support customers in China, and its base in Beijing ETOWN where it has the infrastructure, government support and facilities to continue to expand.


GE Healthcare is already planning its next move – a shift to a new 60,000-square-metre headquarters within Beiing ETOWN on a new site nearby that will enable it to consolidate its existing facilities and create room for further growth.

"We have a large customer base in China and it is our fastest-growing region with wonderful suppliers," says Sommer. "There has never been a country and a time like today’s China in term of the speed and the scale of transformations: from speed to quality of growth, investment to consumer driven economy, from labor intensive to true innovation-led sustainable upgrade. And working here with such good government help gives China even more of an edge."