China needs new R&D models

04 November 2011

BEIJING: Brand owners must modify their approach to innovation to succeed in China, with companies like Starbucks and Hewlett-Packard attempting to lead the way in this area.

Marie Han Silloway, CMO in China for Starbucks, the coffee house chain, told Thoughtful China that foreign firms run 1,200 local centres specialising in innovation, but many fall short of expectations.

"One of the biggest challenges is, frankly, focus. One of the things I would love to see happen here is simply to add some more discipline and rigour into how we innovate and how we approach it," she said.

"I think because the Chinese consumer here is so experimental, they love to try new things, it is easy for companies to lose focus sometimes, and to focus on new flavour extensions or a new colour of the same thing."

Richard Kelly, managing director, Asia-Pacific for IDEO, the consultancy, further suggested that an emphasis on science and technology, rather than customer demand, posed a major problem.

"If you actually ask consumers what they want and actually focus on their needs ... [that] would actually deliver what people want, versus what scientists and research and development people think," he said.

According to Robin Seow, VP, marketing, Asia Pacific and Japan for Hewlett-Packard's personal systems group, certain cultural factors, like an occasional unwillingness to speak out or go against the consensus, retain a role.

Fostering an "appetite for risk and failure" is thus essential, Seow continued: "We have done many tremendous and successful campaigns. We have also had a fair bit of our own failures and risk.

"You need to let the team understand and feel confident that 'I'm given a chance to come up with good ideas to succeed. At the same time, I may trip and I may fail and that is acceptable to the company and my boss."

Ellen Hou, TBWA Group's head of planning, Greater China, asserted a long term rethink was required in the field of education.

"Looking back, the current education system [is] actually not very much different to 20 years ago. Even worse," she said. "The criteria of success is still kind of fitting into the system, which actually [is] the opposite of innovation.

"Possibly this should be the first priority for the whole country to start to innovate in the whole education system and produce certain people and talent with the ... innovative mindset."

Data sourced from Thoughtful China; additional content by Warc staff