Dialogue | A New Paradigm for the Globalization of Chinese Technology Brands

Currently, Chinese technology brands are writing a new business narrative in the global market. Brand globalization is no longer just about market expansion but the global reconstruction of technological paradigms and business ecosystems. As the first new - force electric heavy - truck manufacturer in China to achieve mass production and delivery, DeepWay, an enterprise invested by Qiming Venture Partners, is exploring the global market. At the Spring New Product Launch Conference held in May this year, DeepWay announced that it had signed ordering agreements with multiple domestic and international enterprises, accumulating 2,273 orders for new models of new - energy heavy trucks.

At the 16th RMB Fund Annual Meeting and Investor Summit of Qiming Venture Partners, Zhou Zhifeng, the managing partner of Qiming Venture Partners, had a dialogue with Wan Jun, the chairman and CEO of DeepWay, around the topic of "New Paradigms for the Globalization of Chinese Technology Brands." Wan Jun introduced the opportunity to found DeepWay, the three core strategies, and the market response. He also analyzed the traditional overseas markets and shared DeepWay's thoughts on innovative overseas expansion models.

Zhou Zhifeng (left), the managing partner of Qiming Venture Partners, and Wan Jun (right), the chairman and CEO of DeepWay

When talking about DeepWay receiving thousands of orders in a short period, Wan Jun said that this was strongly supported by the company's three core strategies: Adhering to self - research on core components not only ensures the leading advantage in product technology and reliability but also shapes a corporate culture of independent innovation; adhering to an international route, aiming to achieve 60% of overseas sales by 2030; and adhering to the intelligent direction.

Centering on the topic of the efficient development of Chinese manufacturing, Zhou Zhifeng took DeepWay as an example to introduce the outstanding performance of the enterprise after Qiming's investment, which achieved the delivery of thousands of vehicles in a short period. At the same time, he also shared the current main overseas expansion models of Chinese enterprises. These include direct export, that is, after completing the full - chain production and manufacturing in China, directly selling the finished products to overseas markets; the OEM cooperation model, that is, completing the assembly of finished products through overseas contract manufacturers and then selling them globally under their own brands; and the local operation model, that is, setting up assembly plants in the target market and even launching independent brands according to local needs to achieve full - process local adaptation from production to marketing.

01/

Focus on Industry Pain Points

Combine Technological Solutions and Social Support

Zhou Zhifeng: When we were on a business trip in the United States some time ago and communicating with local investment institutions, we often used DeepWay as an example when mentioning "Chinese speed." Tesla is a leading enterprise in the integration of manufacturing and technology in the United States. The company also has a new - energy heavy truck called Semi, which was launched in November 2017. More than seven years have passed, and only more than 200 units have been delivered.

Wan Jun: We launched the concept car on September 17, 2021.

Zhou Zhifeng: When we invested in DeepWay in 2022, it was still in the "PPT - based vehicle manufacturing" stage. But mass production and delivery started in the third quarter of the year before last, and thousands of vehicles were delivered last year. This year, more ambitious goals have been set. We told many American investors that this is Chinese speed. Mr. Wan was also the founder of China's largest logistics service financial platform. What opportunity made you choose to found DeepWay? Please share it with us first.

Wan Jun: This is actually a typical story of someone who, not satisfied with the taste of pork, decides to raise pigs himself.

I once founded an enterprise, Lionbridge Group. It is China's largest truck finance company and also China's largest long - haul logistics company. Everyone here may be my customer. Consumers are familiar with the "last mile" of transportation by couriers after online shopping. But for the long - haul transportation across thousands of miles before that, everyone may have used our services. One out of every ten express deliveries in China is transported by my long - haul logistics company. We were also once the owner of China's largest long - haul logistics fleet. In the process of using vehicles in the fleet, we found that there were many problems with the vehicles, such as insecurity, low efficiency, being unfriendly to drivers, and insufficient intelligence.

Is there new technology in the new intelligent era to solve these problems? Fortunately, we live in such an era. New - energy technology can solve cost problems, AI or intelligent driving technology can solve safety problems, and Internet technology can solve operation and management problems. Combining these, together with the strong encouragement and support from the national and social policies for energy conservation and emission reduction in the freight industry.

Seeing the pain points in the market, having technological solutions, and receiving support from the country and society, we resolutely chose to embark on the road of researching and developing new - energy heavy trucks.

02/

Three Core Strategies

Zhou Zhifeng: We held a press conference before. In addition to launching products, we also announced the overseas expansion strategy at the business level. The theme of this forum is "New Paradigms for the Globalization of Chinese Technology Brands." Let's talk about the current situation of the company, including the press conference and how to play the big game of going overseas.

Wan Jun: Everyone here today is my indirect shareholder. Qiming Venture Partners led the Series A financing and continued to invest in the Series A+ financing, becoming our very important shareholder. I would also like to report to all shareholders that we held a press conference on May 8. The core of it was two things:

First, announce the results of self - research on the three - electric system, that is, the self - research results of the core components in the vehicle: the battery, electric drive, and electronic control.

Second, launch a new vehicle model equipped with the self - researched three - electric system.

Two weeks before the press conference, we conducted a market trial sale. The figures were very exciting. We received 1,403 (domestic) orders for the products within these two weeks. This may be a small number for passenger cars, but last year, XCMG sold the most commercial electric heavy trucks, with an annual sales volume of more than 9,800 units. By comparison, you can see that this is a quite large number. What made me even happier was that many customers hoped that we could extend the preferential period. So we announced at the press conference that some preferential conditions were extended for one week.

At the same time, we received more than 800 orders from overseas. We have only been going overseas for less than half a year, and we are very happy to receive so many orders in such a short time. What makes me even happier is not the data in the current results but the core driving force behind these results. Our three core strategies have played a very important role.

First, self - research on the core three - electric system. In the past, Chinese vehicle manufacturers did not conduct self - research. They thought that the role of suppliers was to provide components, and what vehicle manufacturers should do was assembly, coordination, calibration, branding, and marketing. The research and development of core components were all handed over to others. We believe that in the new era, we must firmly grasp the research and development of core components in our own hands, with the proportion reaching 50%. As a production tool, the most important indicator for a truck is the power consumption level, which largely depends on the coordination of the three - electric system. Without an independently controllable three - electric system, it is difficult to define a high - quality vehicle.

Based on these considerations, we made the decision to conduct self - research on the three - electric system. In this process, Qiming Venture Partners gave us a lot of support. I believe that the decision of self - research on the three - electric system will lay a very important foundation for the next few years or even decades. It is not only about the leading position in product technology and product reliability but also about establishing a corporate culture, that is, we will do our own research and innovation by ourselves.

Second, we adhere to an international route. Let me first report an important goal announced at this press conference - We hope that by 2030, 60% of DeepWay's sales can come from overseas.

Third, we adhere to the intelligent direction. All our heavy trucks are standard - equipped with an L2 - level combined assisted driving system. Although L2++ is a common configuration in the passenger - car field, imagine how difficult it is to control a truck with a total weight of 49 tons, towing a 17 - meter - long trailer at a speed of 100 kilometers per hour, to achieve assisted driving.

This intelligent assisted driving system can largely free the driver's hands, feet, and eyes when driving on the highway. As of now, DeepWay has completed more than 1.6 million kilometers of zero - risk and zero - takeover L2 - level test mileage, indicating that this vehicle has reached a very high level of assisted driving.

So the implementation of these three strategies of self - research on core components, going overseas, and intelligence is, in my opinion, the most fundamental support for us to achieve such good sales figures today.

This support is more important than the figures DeepWay has achieved itself.

Zhou Zhifeng: According to the full - scope market statistics, we were not the market leader in terms of the number of mass - produced and delivered vehicles last year. What is full - scope statistics?

Wan Jun: DeepWay has a label called forward - looking design. This means that we break the technical boundaries and constraints of traditional vehicles. According to the first - principle, we design the vehicle based on electric drive, rather than converting existing fuel vehicles into electric vehicles. This is a completely different way of thinking in design.

Second, following the principle of starting with the end in mind, this vehicle will be driverless in the future. So the chassis we are building today must be numerically controlled, with hardware and software redundancy, reaching a very high level of functional safety. The truck products displayed outside the venue today are produced and delivered according to this set of ideas. Apart from Tesla's Semi, we are the only ones to have forward - looking designed and mass - produced electric heavy trucks. In terms of delivery volume, ours is much larger than that of Tesla's Semi. In China, most established vehicle manufacturers are converting fuel vehicles into electric vehicles. In essence, they are still fuel vehicles and can only be transitional products, not forward - looking designed electric trucks. Moreover, their product lines include not only tractors but also cement tankers, mixers, etc. We only focus on one type, that is, tractors.

Because in the truck field, tractors are like the "pearl on the crown." If we can do well in tractors, the development of other vehicle models will be a "dimensionality - reduction strike." Our engineers dare to say, "Give me three months, and I can design any other type of truck you want." The aforementioned full - scope statistics refer to the mass - production and delivery data covering all types and all channels. Many enterprises produce and sell multiple vehicle models, while we only have tractors. If we only look at the tractor segment, our industry ranking will be higher.

03/

Think from a Higher Perspective

About Innovative Overseas Expansion Models

Zhou Zhifeng: Let's talk about going overseas. China itself is a huge market with a vast territory, and the scale of our logistics and e - commerce industries is also the largest in the world. Why is DeepWay actively going overseas? How to make the layout? Which countries and regions will be given priority?

Wan Jun: Going overseas is one of the most important topics for new - energy vehicle manufacturers. If we don't consider going overseas, there may not be a very bright future. However, new - energy vehicles face very big challenges when going overseas. Our traditional markets are mainly Southeast Asia, the Middle East, Australia, and New Zealand, and the United States.

Australia and New Zealand have zero tariffs on Chinese complete vehicles, including electric heavy trucks. In Southeast Asia, it needs to be discussed on a case - by - case basis. Vietnam, Malaysia, and the Philippines have a tariff of about 5%, which is still very friendly; Indonesia also has a 5% tariff, but it basically does not allow non - locally produced vehicles. For electric heavy trucks, Indonesia basically does not allow imports; Thailand has a 20% tariff. So different plans are needed for different markets.

In the Middle East, the tariff is basically about 5%. South America currently has very high tariffs on Chinese products, with an average of about 40%. For new - energy vehicles including trucks, the tariff in Europe is 30% - 50%; in the United States, there are various tariffs. In total, the tariff on complete vehicles is 140%, and the tariff on components is 70%. As a separate component, the tariff on batteries is close to 100%.

What we need to think about is not just how to enter these markets. That is a shallow - level thinking. We need to think from a higher level. Why do these countries impose high tariffs and be so defensive?

In the past, limited by the stage of economic development, Chinese enterprises often positioned themselves with inertial thinking. In the early stage of development with relatively limited resources, they often regarded "exporting products to earn foreign exchange" as the core goal. But China has changed a lot. We have grown from a "child" in need of support to a real "adult." But if we still want to wear children's clothes and interact with the world in a "childish" way, I think that's wrong.

Thinking from this higher perspective, we can better understand the attitudes of other countries towards Chinese enterprises. Recall how China viewed foreign investment in the 1970s and 1980s. At that time, we wanted to develop, create jobs, and upgrade our economy. Now these countries are in the same situation. When we can understand the good wishes of these countries to develop their economies and improve people's livelihoods, many things will be easily solved. More importantly, we have the ability and should show the responsibility of a major country.

When we have such a sense of responsibility and thinking, you will find that the whole world will become your friend. Recently, I had a meeting with a European investor. We discussed this issue at the meeting. We put forward our idea that we should shift from product export to the export of technology, model management, brand, and even business models. Different from most enterprises today, we are not obsessed with absolute control or holding a large share in overseas - established companies, nor are we obsessed with our own brand. We hold an open attitude. As long as they are willing to open the market to us, we can develop together and share the brand. There are examples like SAIC - GM - Wuling. Why do we have to hold a large share? If the other party holds a large share and I hold a small share, and I am responsible for operation and management, using China's supply - chain and R & D capabilities to provide more competitive products, these problems can be solved. Furthermore, overseas joint - ventures can also choose to be independently listed on the capital market of the target country. The investor was very excited after hearing this.

When we become more open, more responsible, and more confident, I think resources will tilt towards us. You will find that your relationship with the world becomes better. Our overseas expansion model is generally more open, flexible, and adaptable to local conditions.

For example, in countries like Australia and New Zealand, where there may not be a great demand for the development of new - energy vehicles at present, we adopt the direct - export model. For example, in Southeast Asia, considering the possible problems in direct export, we choose countries that have strong influence in the region and good relations with neighboring countries. If such a country has concerns about Chinese products, we choose to cooperate with it and become a regional brand. In this way, we can get a lot of support and achieve the model of "those who have justice on their side will have many helpers." This is our preliminary thinking. Although there are no implemented cases yet.