Investing in China makes more sense than ever, particularly as it is no longer an emerging market. It is already the world’s largest economy on a purchasing power parity (PPP) basis, produces more electricity than the US, India and the EU combined, and operates seven of the world’s ten busiest ports. It also ranks as the largest global economy if you exclude the effects of exchange rates.
This is according to Foord Asset Management having recently completed its second annual investment immersion trip to China. Hosting a small group of South African investors, many first timers to the east, they explored Singapore, Macau, Shenzhen and Shanghai on the ground – a region that feels like it has outgrown old definitions.
“It is innovating, scaling and competing at a speed the rest of the world struggles to match,” says Rashaad Tayob, Portfolio Manager at Foord, who saw first-hand how companies are redefining what’s possible across industries. He highlights five examples that show why investors should be paying attention:
1. Tea at the speed of light
Innovation doesn’t always look like a new gadget. Sometimes, it’s about how businesses scale. Take Chagee, a modern tea store brand that has rolled out 5 000 stores in just two years. In most countries, the paperwork alone for 5 000 leases and franchise agreements would take years. But in China, the entrepreneurial ecosystem enables lightning-fast replication.
This is “China speed” in action. Chagee’s franchise model is designed for rapid scale without squeezing franchisees. It offers a quality product, low franchise fees, and quick payback periods – around a year on average. In a country with 1.4 billion people and a growing middle class, becoming the “Starbucks of tea” is not far-fetched. For investors, this illustrates the country’s unmatched market depth and operational efficiency.
2. The commoditisation of cars and robots
China’s industrial ecosystem has reached a stage where manufacturing itself has become modular. Similar to the smartphone components industry, China has now commoditised electric vehicles (EV) and robotics with highly developed supply chains. With all components readily available, it means anyone can assemble and brand their own EV or robot.
This has resulted in a fiercely competitive market that’s leapfrogging traditional automakers and setting new global standards for speed, cost efficiency, and consumer choice.
3. A fintech ecosystem that bypasses the West
In China, physical bank cards and Western payment networks like Visa or Mastercard are almost as obsolete as cash. Instead, digital payments via WeChat Pay and Alipay dominate everyday transactions.
This closed-loop ecosystem has eliminated much of the friction associated with traditional banking. For consumers, the experience is seamless; for businesses, it’s cost-efficient; and for investors, it showcases how homegrown digital infrastructure can reshape the entire financial system at scale.
4. The business of branding
Atour Hotels, a mid-range hotel group, is redefining what a hospitality brand can be. Beyond its 1800 hotels – with plans to add 3000 more in five years – Atour has built a lucrative merchandising arm. Nearly 40% of its profits come from selling branded homeware like pillows and duvets, both in-room and online.
For many Chinese consumers, these are their first experiences with branded home goods. A simple branded pillow might cost three times more than a generic one, and yet people are buying them. Even more impressive, around half of Atour’s product buyers have never stayed at one of its hotels. By tapping into China’s evolving middle class, Atour’s success is a masterclass in brand monetisation.
5. A growing local market share
Chinese consumers are increasingly choosing local brands – from gelato to cars – not only because they’re significantly cheaper, but because they now rival imported goods in quality and design. In retail, it’s common to see local stores that look world-class but charge a fraction of what global brands do.
This shift speaks to China’s growing focus on its domestic economy. Local brands are prioritising market penetration over margins in a hypercompetitive business environment that rewards rapid execution and innovation.
These are just a few examples of why China’s investment case remains compelling – to have an allocation to the largest economy in the world will be important, and the opportunities could be massive. For investors seeking exposure to this growth story, Foord offers dedicated access through its global funds, designed to capture these structural shifts while maintaining disciplined risk management.
