Should we look to China for Product Innovation?

Manufacturing in China is a risky game, as I have discussed in previous articles about outsourcing manufacturing services in Asia (Protect your manufacturing heritage by moving to an advanced manufacturing model- http://wp.me/pS6DN-4J). One of the major challenges with manufacturing in China is the risk of imitation or Intellectual property theft, in fact even if you don’t manufacture in China due to these concerns, you may find that an imitation product is being produced and sold in the Chinese market. The problem with intellectual property theft, identity (of brand) theft, or product imitation is that it can lead to a bad consumer experience and subsequent brand erosion. At the end of the day manufacturers don’t want their brands appearing on shelves or online, that purport to be the genuine article, when in fact they are copies. Despite these risks, it doesn’t stop global consumers from searching out and buying counterfeit products, whether it is when they are travelling abroad, or buying over the internet, we seem to like cheap stuff. If it works then it’s a bonus. The thing is though that the counterfeit products are just poor imitations of the genuine article, and don’t work as well, or have major shortcomings. There is definitely no product innovation…or is there?

On a trip to China in early 2010 I discovered some high technology products that I thought were innovative. In particular I came across a variety of Apple copies. I was most interested in the Iphone copies that were available for sale. Features were much the same as a genuine Iphone, although the quality of the touch screen and useability of the applications depended upon the quality of the copy. More importantly there were some unique features that were being added to the Apple catalogue of products that were fairly interesting. One such feature was the dual sim card facility, which meant if you were travelling across borders you could keep your home sim card, and then get a local number as well without needing to change phones. I can see the advantages of that innovation. Another innovation I found was the mini-Iphone. This Iphone was about half the size of the normal Iphone, and the market sellers of these products were suggesting that they were for “women”. This is a brand new product that has developed in China to meet a demand that Apple has not been meeting. I find this interesting.

The Dual Sim Iphone Chinese copy, another innovation?

The reason this experience in China was brought back to mind, was that I have just read that Apple are going to launch mini-Iphones later in 2011.  So perhaps Apple are going to start tapping into this market that was being provided for by the Chinese knock off manufacturers. So does this mean that Apple is following the Chinese innovation? Or is the mini-Iphone a product in development for a few years, and stolen by the Chinese? Irrespective of the answer to that question, examples like these could be an indication of the emerging innovation capacity of Chinese manufacturers.  I have heard it said that the biggest problem with Chinese manufacturers are that they lack innovation, and are only good at copying, well I would suggest this is about to change. China is a manufacturing powerhouse and in the future we are likely to see more of these innovative products emerge. So next time you are in China, check out the latest technology on offer, as it could be a signal to the latest branded products to come a couple of years down the track. But the biggest question is: will it then be a case of large multi-nationals searching for the latest product innovations from China?

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