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What Brands Should Think About Accelerating Innovation in China

By Mark Taner*

Over the years, China has made headlines for its cottage industry of counterfeit, from baby formula to condoms at fake zoo animals. This gave many the impression that China is a nation of copycat producers. But in reality, China has been busy for years coming up with innovative ideas that are changing the way people live, consume and market.

In 2019, China surpassed the United States in the number of patents filed with patents up 30% Last year. Overall, Chinese patents are not considered to be of the same quality as some countries, but the ratio of high-quality patents has doubled over the past five years. In 2021, the country rose to the top 12 countries in the world innovation ranking. Like many manufacturing countries before it, China has learned a great deal about product development from its role as the “factory of the world”. This, combined with a strong focus on STEM in education, heavy investments in R&D and a culture of take risks and fail fastled to a growing number of innovations coming from the Middle Kingdom.

On many fronts, China has been at the forefront of innovation for online consumer applications for the past few years, with the Facebook, Amazons and Apples of the world reproducing ideas from China.

Many Chinese innovations aren’t as sexy as consumer-focused innovations WeChat, live streaming innovations Where smart shopping with facial recognitionbut they are rising to the challenges facing China and the rest of the world. China’s declining population and increasingly expensive labor has seen an increase in robots in retail, warehouses and even robot earthworms to explore engine pipes. In the agricultural sector, Chinese innovations should multiply following its first technology roadmap for smart agricultural machinery. It also shows the first signs of focus on more GM agriculture as he strives to achieve greater self-sufficiency to feed a nation that wants more calories every year.

Some of the most exciting innovations from China are in areas not traditionally associated with the country. A good example is the automotive industry. Even in its home market, Chinese car brands have been widely seen as inferior and unable to charge a fraction of the premium that foreign badges command. Although domestic brands are growing faster, foreign brands still account for the largest market share.

While China is beaten for combustion engines, it leads in electric vehicles. The government quickly identified this as an important future opportunity and doubled its support and grants. In 2018, there were already 487 electric vehicle manufacturers in China. Competition breeds innovation and that’s what we’ve seen with Electric vehicles are as cheap as $4,500 talk about flying cars in a few years.

Globally, growing environmental awareness and soaring fuel prices have consumer interest in electric vehicles reaches tipping point. Although America owns the Tesla brand and legacy auto giants in the United States, Europe, Japan and South Korea are also investing heavily in the wave of electric vehicles, the early support of the electric horse has paid off for China. China produces more than half of the world’s electric vehicles and dominates in supporting industries such as batteries and cell components.

Although EV innovations in China may not seem relevant to many categories of consumers, they are symbolic of Chinese innovation under the radar, which will leave few brands and categories untouched.

For brands, China’s growing innovation presents both opportunities and threats. Innovative Chinese companies present partnership opportunities for foreign brands, both in China and abroad. China’s innovations are also creating opportunities for new and improved channels for marketing, sales and data collection. Innovations create new behaviors, habits and subcultures, which in themselves present possibilities. Like any dynamic market, opportunities will be more likely for brands that stay ahead of innovation and trends.

Mark Tanner is the CEO of China Skinny, a marketing consultancy in Shanghai. This article was first published hereand is republished with permission.