A breakfast with Xing Ma

Shared Bike on WeChat

Impressions from a dynamic innovation landscape in Shenzhen

Thing we can learn and adapt

From Alexander Witte

Shenzhen, September 2019. It is still dark when alarm rings at 4 am. Fast in the sneakers, “Shared Bike” is activated with the Digital Platform “WeChat” and he is ready to go. Xing Ma sprints up three floors. No elevator? “No,” replies the 23-year-old, “I’m faster on foot. The package has to be delivered as soon as possible”. The young Cantonese is a courier for local delivery services such as S.F. Express and now delivers to Tencent’s new headquarters. “Time is money in Shenzhen,” he says.

Only a few people in Germany know S.F. Express or Tencent, but on this September morning the delivery service is worth an estimated six billion euros and thus about as valuable as the Deutsche Lufthansa. The technology company Tencent is even worth 350 billion euros.

dynamischen Innovationslandschaft
Tencent Towers in Shenzhen
The Tencent Towers in Shenzhen. An interconnected building with gardens, running track, basketball court and much more. Today, Shenzhen is on place 6 with the most skyscrapers in the world. Tendency: skyrocketing.

Xing Ma stops at a small stall for breakfast. He simply pays for the soup and soy drink by scanning the QR code on the price tag. The app on his Huawei smartphone comes from Tencent and is called “WeChat”. Unlike WhatsApp, more than a million mini programs run on just this one app. Xing Ma can arrange a bicycle insurance, pay his electricity bill and even pay taxes with one digital platform. He also uses the platform for the best route in real time to deliver the next package. So, the WeChat app offers young Chinese people what Facebook, WhatsApp Messenger, Amazon, Uber, Apple Pay, Deliveroo or even the Runtastic sports app can only do individually. And it can do so much more.

What seems to be an incidental encounter almost 10,000 km away from Germany, has a lot to offer. This is because there are questions that should concern us in Germany. Not only in the next few years, but now.

Why does the young Chinese man not take the elevator, but rather sprints up the stairs?

Anyone who works 6 days a week from 6 a.m. to 9 p.m. has only one goal: to get to the top, participate in social prosperity and growth and always keep the customer in focus.

Success in the digital age is a long-distance race. It is no longer valid to think like the old ways, markets, and forms of innovation from the 90s.

The technology company Huawei from China currently invests 15% of its turnover in digital innovation and research. How much does your company invest in these topics? In the case of innovation and new business models, greed is anything but good. Because with innovations and new business models is how you get/keep your competitive advantage.

Of course, you and your sales team will continue to be successful in your operative business tomorrow morning – but at the same time, you should be a “facilitator of digital innovations”. This requires courage and entrepreneurial thinking and action.

There’s no alternative. No service provider or production company can create digital services and business models without customer feedback. As a coffee producer, you will otherwise be replaced by digital direct mail and Amazon. As a scrap distributor by decentralized scrap exchanges. And as a banker by WeChat, Apple Pay or Check24. As a lawyer by the Robotic solicitor and as a taxi driver not by MyTaxi, but by Airbus Air Shuttle Services with drones.

Why can there be a bicycle courier in China that can organize his life without a bank, credit card and cash, and is still able to pay his taxes?

Our bicycle courier with WeChat only needs an app for this. He can organize everything around his everyday life from a single source. The user prefers service experiences that flow into each other and are easy to use without leaving that medium. Just like WeChat, companies such as Spotify, N26 Bank are also taking this initiative. The compagnies who put their focus on customers in their innovation process and integrates them in the process, wins. The key to success is user experience, also for your company.

Digitalplattform App Innovation WeChat

Why are companies that until recently only a few knew, became so valuable and gain importance every day?

Money flows to where the future lies or where it is strongly suspected. This can be seen if you look at the changes in global share indices over the past 10 years, there it went from the USA and Europe to China. Back then industrial companies, today innovative digital champions with the highest market capitalization. This also applies to Tencent in China.

In today’s age of innovation and creativity, companies that realize what innovative and creative customers need, and think beyond market and industry boundaries, are gaining in importance. Whether China or Northern Germany: If you are a production company, then you build creative business models with partners and customers that offer you new revenue streams. If you are a bank, then you can realize innovative financial experiences that make people more satisfied and make their everyday lives easier. And as a trading or logistics company, there are attractive opportunities to make customer processes simpler, more intuitive and anchor digital value-added services in them. The revenue potential, profit margins and growth potential from these innovations are just as exciting as your business today.

Why does China provide such valuable inspiration for us as entrepreneurs to courageously promote innovative services and business models?

While WeChat had around 450 million active users in 2015, 5 years later the figure was well over 1 billion. One reason is that the Chinese do not simply copy WhatsApp but offer the user real added value and reinvent themselves every day.

New ways of paying with QR-Code
QR-Code Payment with WeChat
Breakfast in Shenzhen: pay conveniently with the QR code via WeChat.

Another reason is “Thinking out of the box” and speed. This requires the recognition of opportunities for new business models across markets and industries, courageous investment and agile step-by-step implementation.

It is also about the corporate and leadership culture. If you offer a sales manager a higher salary for more turnover and profit, then he is guaranteed to sell more of what is already there. If you want to sell something new in one year or two years, then you need innovative business models that create customer value and new revenue streams.

What does this mean for Germany and Europe?

Innovation in the digital age only leads to prosperity in Germany and Europe if the added value also reaches your company and our society. Courageous entrepreneurial action is therefore a basic prerequisite for ensuring that socially insured people for example in Bremen, Hamburg or Hanover will also have a home in the future. Creative, fast and agile. Just like the bicycle courier Xing Ma from Shenzhen.

Alexander Witte bei der AHK Innovation Night in Shenzhen
Alexander Witte is Managing Partner at Early Brands Innovation & Technology Consultants in Bremen. A few weeks ago he was in Shenzhen with a delegation from the Bremen Chamber of Commerce and Industry (IHK Nord und Handelskammer Bremen) and shares his impressions from the international innovation landscape.

Originally published (in German) at: https://handelskammer-magazin.de/downloads/

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