Fake designer handbags, expertly copied Old Master paintings, and even fake real-life versions of Paris and other European cities: China is undoubtedly home to some of the world’s most skilled and prolific plagiarists. Much ink (and many pixels) has been spent in Western magazines and blogs to analyze China’s culture of copying: is it a deep-seated cultural preference, a product of lacklustre intellectual property laws, or has it sprung up for some other reason?
Either way, it’s easy for commentators to overlook the innovation occurring in the Chinese business world today, especially in the nation’s internet and tech start-ups, many of which are based in Beijing. As China’s economy matures, and the demand of its vast population for locally produced goods grows, expect to see more new ideas from the nation’s entrepreneurs to arise. Ideas that will serve local demand but could ultimately prove disruptive on the global stage.
In this editorial, China Brain will introduce three disruptive innovators with world-class visions. Operating in the worlds of social media, cell phones, and e-commerce, these three leaders represent the cutting edge of Chinese entrepreneurialism that is ready to compete with the world. They are three people we expect to become household names inside and outside of China in the near future.
Bo Yang – Douban
In many ways Bo Yang, commonly known by his Weibo moniker Ah Bei, is a hero amongst Chinese youth. He is the inventor and founder of Douban, a site which combines all the functions of a social media platform, IMDB, a MySpace-style music sample source, a gig and event guide, a radio station, an RSS feed, and a comprehensive discussion forum. Its vast arc of content has attracted more than 62 million registered users, and its enormous popularity, especially with China's intellectually and alternatively minded, is unparalleled in the world.
It is principally a site for the sharing of thoughts and interests, but unlike Twitter does not restrict its users to 140 characters to express themselves. Douban allows for lengthy discussions on the poetic works of Borges, the post-modernism of contemporary Japanese anime, the politics of modern art and many other specialist and esoteric topics. Its reputation for these kinds of discussions, however, has brought it into some censorship confrontations with the government. After a series of touchy discussions, a ban on that most sensitive of topics, Tiananmen 1989, has now been thoroughly enforced.
The site is also good business, for more than just Bo Yang. The books, films and music talked about are all linked to external shopping websites. For example, Douban is now the top affiliate of Amazon China, Dangdang and a handful of other book retailers. Douban users spend a total of RMB200million on books every year.
Lei Jun – XiaoMi
Lei Jun, is the 43 year old founder and current CEO of XiaoMi, a company which produces fashionable and reliable alternatives to iPhones and Samsung Galaxies, at lower prices. The company began as an internet start-up back in 2010 and has grown exponentially since the release of its first Android-based smart phone in September 2011. In the first half of this year alone, XiaoMi have sold 7.03million handsets, worth a total of US$2.16billion, and are on target to more than double 2012's total sales and profits.
Also the Chairman of Kingsoft software company, with a stake of US$300million, Lei Jun is a self-styled Chinese Steve Jobs, even down to the black shirt and jeans he regularly dons for press conferences and launch parties He has drawn some criticism from the Western media for this behaviour with some viewing his success based on a shameless like-for-like imitation of the world’s most successful innovator. More of this criticism may be flooding the media again soon as XiaoMi are set to release their first tablet device later this month, rumoured to be priced at just RMB999 (US$163).
But the company's model of high-power, high-tech phones at affordable prices is certainly a popular one. The company has already spread to Taiwan and is now targeting the technology-saturated Hong Kong market. Other potential markets are those of South East Asia, India and perhaps certain African countries. In these emerging markets, low cost, high-tech smart phones and tablets have the potential to 'leapfrog' the need for personal computers. In fact, this process has already occurred in many places within China.
By offering quality products at a lower price point, Lei Jun is already a towering success story within Mainland China. Both his and XiaoMi's reputation, despite the criticism of, in the New York Times' words, “aping” Apple's success, may soon reach the global stage. His is a name to look out for.
Alan Guo – LightInTheBox
The third entry on our list is perhaps the most startlingly innovative e-commerce founder based in China. In an interview with Silicon Valley blog PandoDaily, Guo described his business LightInTheBox as “cell-based, flash manufacturing.” Basically, Guo and his colleagues are harnessing China’s inexpensive and adaptive manufacturers to the global consumer market – and they’re doing so directly, cutting out the middle man- the traditional retailers.
High-end garments such as wedding gowns are one area where LightInTheBox has a particular edge. The company can deliver an individually tailored product in less than a month for less than 250$ U.S. The key innovation is on the factory floor: rather than producing the same design for weeks, workers are divided into smaller teams equipped with computer screens that tell them which design they are meant to be working on, allowing factories to maintain a portfolio of wedding dresses for LightInTheBox and to produce models in particular measurements on the fly.
By tweaking the traditional Henry Ford-developed factory model, Guo is helping to adapt large-scale manufacturing processes for the individualized consumption of e-consumers. A veteran of Google and Microsoft’s Asian arms, Guo has spent most of his adult years in the U.S., and holds a PhD from Stanford. Bringing his experience of working in top-notch U.S. tech companies has granted him an edge in developing an idea that could only have been born in China.
Buying personally tailored products on the internet isn’t new, but reorganizing garment manufacturing, especially in the world’s clothing production powerhouse is. Apparel will be the leading driver of growth in e-commerce over the next several years, according to a study published last year by digital media market analysis firm eMarketer. LightInTheBox appears well-positioned for future growth with both a successful strategy to attract consumers and a unique manufacturing process that is specific to China.
The burgeoning prospects of these three entrepreneurs show that the future is bright for those individuals with new ideas and an ability to provide what the new consumer class in China wants. Successful Chinese companies and start-ups are no longer just copycats. There is genuine innovation emerging, and much of it merits exposure to the markets outside of China. There is a new generation graduating from China's elite universities as we speak. This is a generation thoroughly saturated in technology, in the logic of the free market and with truly international outlooks. China Brain's further prediction, then, is that there is a whole generation of innovative business leaders waiting to fill the shoes of Bo Yang, Lei Jun, Alan Guo, and others. What will that generation promise China and the world?