Proudly made in China. How the Asian giant is determined to make a name in innovation

By Laura Blanco and Yolanda Gonzalez *

China used to copy Silicon Valley, but now Silicon Valley copies China’ said Li Len from Zhubaijia

Zhubaijia is a Beijing and Shenzhen based start-up operating similar model to the 2008 founded San Francisco Airbnb. While Zhubaijia started only in 2012 they quickly grasped the pressing needs of travellers helping them out to plan the entire trip, not just housing. The paradox behind was that Airbnb just mirrored same service only a few months ago.

Last month Xi Jinping called for stronger efforts to make China ‘a country of innovators’ at the 19th National Congress of the CPC in Beijing.

How do we, as guests working and living here, see the daily evolution towards a highly innovative China?

A polyhedron with many faces

China’s ability to innovate happens in various ways, sometimes all at once

There is an increasing interest in technology sophistication but even more important for a massive market like this one are the cost cutting and the process innovation. Reduction of production, delivery, and supply chain costs are three variables well understood by Chinese entrepreneurs.

Not only technology but business model innovation or adaptation to new unmet customer needs also pay it big in China. If the idea or service really solves some problem or makes life better, the massive scale of Chinese market provides plenty of room for volume based success. And fierce competition sharpens up creativity and keeps companies and entrepreneurs vividly alert for constant iterations.

A rising star example of sharing economy are bike sharing companies

Mobike and Ofo both started in 2015. Today they have both more than 100 million registered users. Cheap, omnipresent, dockless, environmentally friendly and a solution to congested traffic are reasons to bring the bikes back to the cities. And all that in the era we thought the car was the main character in the ripe for disruption transportation industry. The business explosion was such that industry standards had to be released recently to manage the rapid growth of related start-ups (more than 50 today according to Shanghai Bicycle Association). Today Ofo is valued at 1 billion USD and Mobike at 3 billion (https://www.cbinsights.com/research-unicorn-companies ).

All things are difficult before they are made easy by some App…

Jack Ma (马云), founder and CEO of Alibaba plans to convert Tianjin (largest coastal city in northern China) into a cashless city as he declared in June at the first World’s Intelligence Conference in the same town. Cashless payments can be used in plenty of services.

Today China’s top of electronic payment is WeChat

WeChat (微信) by Tencent has 963 million monthly active users (https://www.statista.com/statistics/255778/number-of-active-wechat-messenger-accounts/). They have been constantly improving their customer experience since their launch in 2011, outperforming its Western counterpart WhatsApp. Alipay (Jack Ma’s version of Elon Musk’s cofounded Paypal) is a close second option and Baidu (百度) and QuickPass (银联闪付) offer a similar template.

And ‘easy’ makes money big time. But e-payments are also a vehicle to combat tax evasion and corruption. And once you enjoy the convenience of digital payment solutions you wonder why the Western countries have been left behind by China in this regard.

Next step is being facial recognition. KFC has already been testing ground and also other firms.

A deeper focus in high tech

Some interesting achievements that illustrate China’s current state in regards of technology:

China technology transfer Hispano-Asian Business Consulting
Drons in Changsha (Hunan province)
  • China is home of four of the world’s 10 largest Internet and technology companies: Alibaba, Baidu, Tencent and Xiaomi.
  • China has filed more than 8000 A.I. (artificial intelligence) patents in the five years to 2015 (https://asia.nikkei.com/Business/Trends/China-AI-patent-submissions-shoot-up ). Meaning this a 190% growth rate outpacing other leading markets… and these are just the early days of A.I.
  • FAST, the world’s largest radio telescope is in China (Guizhou province), a 500m aperture spherical facility that surpassed the 300m Arecibo Observatory in Puerto Rico that assisted Princeton Nobel prize-winning astronomer Joseph Taylor. And they have begun operating it already.
  • China has seen an extremely rapid rise in drone growth in terms of production and usage. DJI Dajiang Innovations with HQ in Shenzhen and offices in China and all over the world is the leading firm in civilian drones by keeping approximately 70% of the market.
  • China high speed railways exceeds 22,000 km in total length. It is also the only country that operates bullet trains with a speed of 350 km/h. This convenience in commuting is also helping the rise of China’s secondary cities.

More Universities competing worldwide

According to Reuters Top 100 Most innovative Universities 2017, China has gone from one university on the list in 2015 to two in 2016 and now three in 2017 (Tsinghua University climbed 15 spots to #51, and Peking University climbed 10 spots to #60). Then the third, Zhejiang University, appears on the list for the first time at #100. Considering the speed of things in China one could think we will see rapid improvements in this field too.

China is also offering scholarships and programs to attract more foreign students.

China will continue to invest in development driven by innovation and will continue to have strong Governmental support. Above all the positive attitude and willingness to achieve will take China far. And there is a big lesson here: it’s time to understand China to their fullest potential and strengthen the cooperation.

The dragon is awake!!

Chinese Dragon. Business Hispano-Asian Business Consulting

(*) Laura Blanco (Shanghai) and Yolanda Gonzalez (Changsha, Hunan), China, November 2017

We wrote this post ourselves and it expresses our own opinions. Laura works at Höganäs AB and Yolanda at Hispano Asian / Changsha Lulian Business Consultants. We have no business relationship with any other company mentioned in this article.

We’d like to show our appreciation to John Moon for assistance. Thank you also to the people who provided us with pictures: Xiaomin Jiang (picture of Westin Bund Center), Yannick Benichou riding an Ofo bike in Beijing and Zahara Teng also from Höganäs using WeChat quick pay function at a convenience store.

Thank you for reading our post! If you enjoyed it please let us know by clicking the thumbs up icon. Feel free to comment or to ask any question, we’ll do our best to comment back to you!