Market-orientated innovation boosts Guangdong's private economy

By Qin Qi
0 Comment(s)Print E-mail, September 13, 2019
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Smart bluetooth devices at the smart-life imagination showroom in 3nod Group, Shenzhen, Guangdong province, Sept. 7, 2019. [Photo provided by]

Imagine waking up to a soothing voice greeting you good morning, followed by tips on the day's weather. Does that sound a lot more pleasing than the annoying ringing of your morning alarm? The smart housekeeper, Xiaonuo, manufactured by Guangdong-based 3nod Group, can do just that.

The company is the largest total solution supplier of audio products in the world focusing on creating a "smart life." It is building a smart home platform, including acoustics, home appliances and furnishing, etc.

To better integrate its innovations with the market, 3nod has built the business model of "Original Planning Manufacturer" (OPM), providing total solutions, from the design to the manufacture of products based on customers' requirements, according to Liu Zhixiong, CEO of 3nod. 

In a bid to better understand the market, the company uses big data to analyze customers' preferences and provide tailored services for them. 

"We will stick to OPM instead of the original equipment manufacturer model," he said, referring to the more commonly seen business model adopted by manufacturers, "Only by sticking to original design can 3nod continue to leapfrog others' achievements."

3nod Group is one example of innovation-driven private companies in Guangdong.The province is home to eight Chinese private firms listed among the world's top 500 in 2018, including tech giants Huawei and Tencent.

Ding Li, an expert studying regional economy, observed, "Guangdong's private enterprises feature market-orientated innovation, which is one of their major advantages. To truly execute on market-orientated innovation, enterprises need to know the market well and complete the supply chain."

Vanward, the largest gas appliance manufacturer in China, has consecutively topped the domestic gas appliance markets for 15 years and is another example of market-orientated innovation. 

Ding, who had done research on the company, said, "A lot of traditional manufacturing companies stop at the stage of "the product", having no clue whether their products will be sold or whom their products will be sold to." But unlike these companies, Vanward has been building retail stores across the country to complete the supply chain. 

According to a manager at Vanward, the company built 3,287 retail stores in 2018, increasing the total number of such stores to over 15,000. This has contributed to the company's profits increasing by over 20% last year, despite the drop in other similar companies' profits in 2018, according to the manager.  

According to an official from Guangdong's Department of Finance, the private economy made up more than 50% of its GDP and contributed to 75% of new innovations and 80% of new jobs in 2018.

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