A recent CBBC webinar hosted by Mark Hedley, Director of Tech and Knowledge Economy at CBBC and featuring an expert panel including John Mathers, chair of UK Design Intelligence Awards (DIA) judges, Thang Vo-Ta, CEO of 2020 winner Callaly, and Dr Stephen Green from Imperial College London, explored how UK companies can leverage their skills in design and innovation.

Learn from China’s example

China’s innovation capacity has grown by leaps and bounds in recent years, and this trend is only set to continue. In a speech during the Two Sessions meeting in March, premier Li Keqiang said that China’s R&D spending is set to increase by more than 7% per year between 2021 and 2025.

The number of design colleges in China has increased from 300 to 1,800 over the past 10 years, and there are thought to be more than 50,000 design professionals in China, including a new generation of advanced digital designers.

As a result, China has numerous examples of outstanding innovation, both physical and technological. During the webinar, John Mathers pointed to examples such as Alibaba’s Hema supermarket chain (sometimes known as Freshhippo in English), which seamlessly blends online and physical retail, mobile payment and fresh produce delivery to create a powerful omnichannel strategy, as well as super-app WeChat, the multi-functionality of which has huge implications for the life services industry of the future.

Leverage the strength of UK higher education

Higher education is one of the UK’s key strengths, and ongoing design and innovation programmes offer key insights for companies. Stephen Green described how Imperial College London’s Innovation Design Engineering programme fuses “design thinking, engineering knowledge and practice, within a culture of innovation and enterprise.” The programme is run in partnership with the Royal College of Art, underscoring the importance of good design and even artistry in creating successful products. 

In addition, getting involved with higher education gives companies direct access to the next generation of design talents, as Stephen has found in his other role as director of the British Industrial Design Association.

Test the market and don’t make assumptions

Many of the companies that have successfully conquered the Chinese market have done so because they entered it with both “empathy and understanding,” said John. Both John and Thang Vo-Ta stressed the importance of market research, especially for FMCG firms, as many companies simply do not have a foundational understanding of the Chinese consumer. “Of all the countries we tested our products, China had the strongest results in certain things we would have never expected,” Thang commented. For example, China’s tech-savvy, smartphone reliant consumers have higher than average requirements for customer service due to the rapid response times that platforms such as Taobao have cultivated.

Look at the big picture

From initial idea to China launch, companies need to consider the big picture. Long before they start thinking about how their design will work in China, they should be asking what purpose it serves and what real-world problems it solves. In his concluding remarks, John pointed to the strength of China’s “long-term thinking, vision and pragmatism” as being something that the UK design industry can learn from.

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Approaching the China market can be overwhelming, especially for small businesses. It is necessary to weigh the costs and benefits of trading in a new country and a new business context. HR, customs challenges, different business cultures, and other considerations can be a lot to work through.

However, Kevin Shakespeare, director of stakeholder engagement at The Institute of Export & International Trade, says that many of the areas that give businesses reason to pause when considering trade with China – such as inspection certificates – will soon also apply to trade with the EU. It is something that all exporting businesses will have to get used to and prepare for, so China will not necessarily be significantly more complex than any other export market.

Many of the areas that give businesses reason to pause when considering trade with China – such as inspection certificates – will soon also apply to trade with the EU

One of the most common concerns among businesses interested in China is that of intellectual property (IP) protection. St. John Moore, Chairman of the British Chamber of Commerce in China, says that for many years, IP has featured among the top three areas of concern for UK companies responding to the Chamber’s surveys. However, last year, it dropped out of the top ten, indicating that businesses operating in China are becoming less concerned with IP issues as the Chinese government implements more regulation to confront counterfeiting. “As long as businesses take a thoughtful approach to IP, it should not hold them back,” he says. The same can be said for many of the market access challenges facing businesses in China.

Companies looking to enter or expand within the China market will need to explore the different regulations, registration processes, and rights protection strategies that apply to their business, and learn about China’s unique commercial environment, including different payment methods and market leaders. E-commerce and social media both drive consumer spending and if companies are looking to produce sales in China, they must be willing to invest in understanding and building a strategy around China’s key e-commerce and social media platforms. Even if on-the-ground development in China is still a few years away, businesses should familiarise themselves with the commercial environment and look at making initial enquiries into areas such as IP now, in order to help protect their businesses later on.

Specific areas of opportunity for British businesses include green energy, legal services, education, consultancy, finance, and cross-border e-commerce. Kevin Liu, head of China and head of energy Asia Pacific for Scottish Development International, says that there are opportunities for the UK and China to draw on one another’s strengths in specific areas such as offshore wind technology, and that “China is looking towards the UK to resolve these questions.”

There has also been increasing inbound investment into the UK from China in recent years. Damon Peng, regional director, East and West China of Invest Northern Ireland, says there has been strong inbound investment in the technology and education sectors in Northern Ireland in recent years. There has also been “a dramatic increase in food and drink exports to first- and second-tier Chinese cities too.”

Kevin Liu also says that there is great potential for boosting trade between China and Scotland, as Scotland currently accounts for less than one percent of UK-China trade.

Chinese students in the UK continue to be an important factor for international investment and student visas have been a key indicator of UK-China diplomatic relations in recent years.

The British Chamber of Commerce in China’s Position Paper 2020, highlights the need for a robust, long-term strategy for UK trade with China, and suggested that China must be a priority for a Free Trade Agreement (FTA). UK products and services are well regarded by Chinese consumers, however, amid ongoing global tensions and following Brexit, there is a need for a comprehensive approach to supporting ongoing trade between China and the UK.

In addition to supporting the need for an FTA, Guy Dru Drury, the chief representative for China, North East and South East Asia at the Confederation of British Industry, says that university education is the soft power association with this exchange and a “core asset” to UK-China relations. Chinese students in the UK continue to be an important factor for international investment and student visas have been a key indicator of UK-China diplomatic relations in recent years.

The British Chamber of Commerce in China’s Position Paper 2020 also notes that British businesses are “cautiously optimistic,” when it comes to relations in a post-Covid-19 world. Whilst current events have posed temporary challenges to conducting trade with China, the paper highlights recent positive steps regarding trade, regulation, and market access for UK businesses in China. As companies around the world work on overcoming challenges posed by the global pandemic, it is important to engage with China, to read past the headlines, and act on the wealth of experience of British businesses already operating in China.

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