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India Innovates, China Makes, America Buys
Friday, June 18
Wall Street Journal
By Devita Saraf
Anyone whose daily commute includes the clogged roads of Mumbai would be temporarily enthralled by the butter-smooth roads and highways of China. Having recently spent yet another week in Shenzhen visiting potential suppliers, it is not hard to marvel at the infrastructure built by the Chinese to boost their economy and support their factories. I even saw a field of cranes. Not the bird, but the container-lifting ones.
Yet, having visited the country often enough, I am wary of the pomp and show of the Chinese economy. Sure, it had the worlds biggest importer and global retailers wrapped around its fingers. But there is a piece missing a piece that presents an opportunity for India.
The biggest advantage of Chinese factories is their quick turnaround time from prototype to sample. In todays ever-changing business scenario, it is important that importers are able to reduce their time-to-store. Zara, the successful Spanish fashion retailer, has a turnaround time of just three weeks from design to stock in store.
The Chinese are the best at looking at a product and creating the exact same thing, whether for a client or counterfeit. I saw many iPad knock-offs at the trade shows in China not long after the launch.
This is not to say that their success has been built on blatant copying. The Chinese have been able to adapt the foreign customers requirements and innovate the best they can to produce a product closest to the brief. This in itself requires great innovation skills. They have also hired the best minds from Europe and the U.S. for their own architectural design. Beijings modern day marvels built for the Olympics have been joint efforts by the Chinese government and European firms such as OMA.
The other benefit that Chinese factories have is that they are able to get a fresh stream of product designs from America and Europe. They learn to make the latest designs in the latest materials and then sell these products to emerging economies such as India. Interestingly, the buying rates for an American customer are lower for customers from the Middle East or India.
So what it shows is that China is hungry for good product design that it can copy, manufacture and ship. Countries like India have stronger intellectual property protection and can patent good product design and sell it.
Spotted the missing link yet?
India designs it, China manufactures it and America buys it. In an ideal world.
India has much better skills in original thinking and our brands have much more potential to go global. A Tata Nano or Mahindra tractor can do much better than the Geely or Byd Chinese cars because they have been designed and built exclusively for an emerging market like India. They are not watered-down versions of Japanese cars.
In most industries, we have great products and great branding and, matched with capital, it can go global. Unfortunately, even the oldest industrial houses are moving manufacturing out of India because China offers more.
It will be a while before Indian manufacturing bounces back. To begin with, we cant prototype. Our small-scale industries of fabricators and contractors are a pitiable lot to work with on most days. You would think they want business but if you want to get a TV bracket made, you are at the mercy of the makers timetable. And it is difficult to get a small-scale Indian manufacturer to ramp up. He will never have the ambition to grow like a Chinese small-scale manufacturer with big dreams. It is much easier for my team to coordinate with a team in Taiwan or China to get the basic work done.
But what we can do is design what we want. A good sense of the customers needs, materials, budgets and beyond allows us to be the supplier of Chinas hunger for global product design. In the future, I see a stronger partnership between Indian companies designing their own products and getting them manufactured in China rather than picking up what an American company made a few seasons ago that has washed up at a China trade fair.
Its a great opportunity for India, to get paid for what we do best innovate.
Friday, June 18
Wall Street Journal
By Devita Saraf
Anyone whose daily commute includes the clogged roads of Mumbai would be temporarily enthralled by the butter-smooth roads and highways of China. Having recently spent yet another week in Shenzhen visiting potential suppliers, it is not hard to marvel at the infrastructure built by the Chinese to boost their economy and support their factories. I even saw a field of cranes. Not the bird, but the container-lifting ones.
Yet, having visited the country often enough, I am wary of the pomp and show of the Chinese economy. Sure, it had the worlds biggest importer and global retailers wrapped around its fingers. But there is a piece missing a piece that presents an opportunity for India.
The biggest advantage of Chinese factories is their quick turnaround time from prototype to sample. In todays ever-changing business scenario, it is important that importers are able to reduce their time-to-store. Zara, the successful Spanish fashion retailer, has a turnaround time of just three weeks from design to stock in store.
The Chinese are the best at looking at a product and creating the exact same thing, whether for a client or counterfeit. I saw many iPad knock-offs at the trade shows in China not long after the launch.
This is not to say that their success has been built on blatant copying. The Chinese have been able to adapt the foreign customers requirements and innovate the best they can to produce a product closest to the brief. This in itself requires great innovation skills. They have also hired the best minds from Europe and the U.S. for their own architectural design. Beijings modern day marvels built for the Olympics have been joint efforts by the Chinese government and European firms such as OMA.
The other benefit that Chinese factories have is that they are able to get a fresh stream of product designs from America and Europe. They learn to make the latest designs in the latest materials and then sell these products to emerging economies such as India. Interestingly, the buying rates for an American customer are lower for customers from the Middle East or India.
So what it shows is that China is hungry for good product design that it can copy, manufacture and ship. Countries like India have stronger intellectual property protection and can patent good product design and sell it.
Spotted the missing link yet?
India designs it, China manufactures it and America buys it. In an ideal world.
India has much better skills in original thinking and our brands have much more potential to go global. A Tata Nano or Mahindra tractor can do much better than the Geely or Byd Chinese cars because they have been designed and built exclusively for an emerging market like India. They are not watered-down versions of Japanese cars.
In most industries, we have great products and great branding and, matched with capital, it can go global. Unfortunately, even the oldest industrial houses are moving manufacturing out of India because China offers more.
It will be a while before Indian manufacturing bounces back. To begin with, we cant prototype. Our small-scale industries of fabricators and contractors are a pitiable lot to work with on most days. You would think they want business but if you want to get a TV bracket made, you are at the mercy of the makers timetable. And it is difficult to get a small-scale Indian manufacturer to ramp up. He will never have the ambition to grow like a Chinese small-scale manufacturer with big dreams. It is much easier for my team to coordinate with a team in Taiwan or China to get the basic work done.
But what we can do is design what we want. A good sense of the customers needs, materials, budgets and beyond allows us to be the supplier of Chinas hunger for global product design. In the future, I see a stronger partnership between Indian companies designing their own products and getting them manufactured in China rather than picking up what an American company made a few seasons ago that has washed up at a China trade fair.
Its a great opportunity for India, to get paid for what we do best innovate.
