Re-inventing Innovation in China
Last week I had the pleasure of attending the World Economic Forum’s annual global business gathering in Asia. Known as the ‘Summer Davos’, this is the fourth such meeting held and over 1,300 international industry, government and thought leaders attended. The theme of the meeting was driving growth through sustainability. I’ll discuss some of the fascinating insights that were raised in my next post.
New York Times on Chinese Innovation
Following my last post on the push by Chinese companies to introduce constant innovation in their businesses, I recently came across an interesting New York Times article which gives a good indication of how this is happening across China.
The article details how in the face of a dramatically changing economic landscape three Chinese manufacturing export-driven companies are making the transition from the captive low-cost export business model to new innovative approaches to their businesses.
One company which previously only produced small household appliances like vacuum cleaners and electric toothbrushes on contract (with punishingly small margins) for huge multinationals, is branching out and developing its own brand. Despite the possibility that its clients will not be happy with the competition, the owner believed he had no choice. It was a case of innovate or die!
Another very large clothing making company, (they manufacture and supply 1 out of every 6 shirts that is sold in the US), which supplies J.C.Penney’s 1,100 retail stores with shirts has adopted a completely different, but equally innovative approach. They are working with its major customer to develop a computerized stock control system whereby it can track inventory levels thereby reducing overstocking which is the bane of all retailers and their suppliers.
I am seeing this type of re-invention in the Chinese manufacturing clients of my business, DHgate.com. As a result of economic circumstance and a growing sophistication, more than ever there is a strong realization that low-cost Chinese manufacturing companies must adapt, innovate or face an uncertain future.
DHgate.com actively promotes this process. Recently we have started a program with one of China’s largest banks to provide ‘microloans’ to international export orientated SME’s to enable them to overcome financing barriers. This new scheme not only allows more Chinese SME’s to enter the export market thereby providing incentives to improve quality and service to the international market, but also gives international buyers a greater range and variety of products options and prices.
As well as instituting our Supplier Training program which I have mentioned before, a new initiative by DHgate.com is the launch of a network of Trade Assistance Centers across China and major locations throughout the world which will foster and facilitate international trade by SME’s. I’ll give some more details of this project and how it can benefit international SME purchasers of Chinese products in the future.