18 July 2019
Shenzhen has developed an ecosystem that has substantially shortened the product development cycle for a much lower cost. Photo: Reuters
Shenzhen has developed an ecosystem that has substantially shortened the product development cycle for a much lower cost. Photo: Reuters

Why rampant copying hasn’t stopped Shenzhen’s advance

Shenzhen is known as the capital of knockoffs. If a company wants to leverage on Shenzhen’s strong manufacturing ability, it has to be prepared for the very real possibility of its proprietary ideas being copied.

That’s a big concern for companies who view design or innovation as their core strength.

However, that has not stifled the growth momentum of Shenzhen. The city’s GDP hit a record high of 2.24 trillion yuan (US$355.4 billion) last year, exceeding that of Hong Kong for the first time.

Why haven’t rampant copying activities deterred foreign investors and stopped the city from upgrading itself? The experience of one Swedish product designer may provide some insights.

I met this Swedish product designer during a recent visit to Shenzhen. He has designed a Bluetooth toothbrush for a European brand. He has been developing his business in Shenzhen for two years.

I was surprised how a European who cares a lot about intellectual property manages to survive there.

The fact is, the Swedish designer has had some bitter experience in Shenzhen: his design was copied by others and competitors even launched a product with enhanced features based on his original design.

But the reality is that the process of developing a product from the drawing board to a prototype can easily take nine months to one year in Europe or the United States.

Launching the second-generation product after collecting market feedback and doing further R&D work is equally time-consuming.

In Shenzhen, however, the product development cycle is shortened substantially – and for a much lower cost. If you’re really in a hurry, you can get a prototype done in one day.

The Swedish designer believes that if he does the product development in Europe, he won’t be competitive enough and could be out of the game very soon.

Known as the Silicon Valley for hardware, Shenzhen boasts a full supply chain of parts and components of all kinds, enabling fast prototyping and testing. There is also a complete infrastructure to help makers mass-produce a product.

In other words, a designer based in Europe may still be waiting for the prototype while another designer with a similar product idea but based in Shenzhen may already have the product finished and ready for the market.

From being a knockoff center, Shenzhen has come a long way in transforming itself into an ecosystem of fast-learning supply chains.

This article appeared in the Hong Kong Economic Journal on April 20

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Information Technology Federation Chairman

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