Xiaomi & Shanzhai
What happens when a copy becomes better than its original?
When photos of the Mi Mix smartphone hit the web, more than a few jaws also hit the floor. Black, sexy and ceramic with a bezel-less display, this sophisticated Philippe Starck designed phone was exactly the kind of device that a young Steve Jobs might have imagined and then built. Except this wasn’t Apple. It wasn’t even American. It was Xiaomi, a Chinese manufacturer once known for copying, rather than creating products.
To understand the rise of Xiaomi and the growing number of emerging Chinese technology and appliance brands, you need to know something about the way that the Chinese think about innovation.
Valerio Cometti, a good friend of mine from Milan, is an Italian industrial designer. He once told me the story of how he was invited to China to help some local brands with their design process.
One by one, a group of tapware manufacturers brought in their products and placed them on the table in front of him for his feedback. To his astonishment, none of the brands had invested in a single, uniform product range, their product catalogs were filled with literally thousands of designs, from Baroque swans to spaceships.
Valerio realized that the Chinese approached design and innovation very differently to the West. Rather than enforcing a strict product vision, mainland brands tended to leave it to the consumer to decide what features, functions and forms they want.
Like taps, Chinese consumer electronics exhibit a similar kind of product fecundity, especially the infamous devices from Shenzhen known as ‘Shanzhai’.
Shanzhai literally translates as ‘mountain stronghold’. Once a term used to suggest something cheap or inferior, Shanzhai has come to represent a certain Chinese cleverness and ingenuity.
Shanzhai devices are generally modeled on a famous original concept. Three months before the iPhone 5 was announced, a local manufacturer managed to not only steal the design, but also release its own version, the gooPhone i5. To add insult to injury, they immediately copyrighted and threated to sue Apple. Not all Shanzhai designs were direct copies. Many sought to ‘improve’ on the original with the addition of TV tuners, dual-SIM card support, higher resolution cameras, solar chargers or telephoto lenses.
Xiaomi is a case in point. Long before its Mi Mix smartphone, it already established itself as the first mainland brand that local teenagers actually wanted to own. They sold online using flash sales strategies, and priced near cost. Their plan was to make money from software, accessories, and expanding margins as the cost of components fell over time. In other words, a very different, rather than purely derivative, device company.
Xiaomi is not alone in their unique approach to innovation. When I speak, I often tell the story of Haier, the world’s largest white goods manufacturer that decided to learn from their customers’ strange use rituals, to re-engineer their washing machines to be able to wash not only clothes, but potatoes. Joyoung is another example. A Hangzhou-based appliance company, their first invention was an unlikely machine that makes soy milk. It went on to become a diversified maker of small household appliances that include steamed bun cookers, noodle makers and robotic chef tools.
Whether it be industrial robots, consumer appliances, smart devices or messaging ecosystems, China is not only catching up to the West, it is in many respects already surpassing it. Shenzhen, where most of the world’s smartphones are assembled, has become ground zero for a highly flexible and rapid manufacturing ecosystem.
Shanzhai brands may have started out as copiers, but they have now become something else entirely: creative, customer-focused idea factories.
If you are interested in more of my ideas, you can stalk me on the Web. I spend 300 days a year travelling: researching markets, interviewing clever people, giving talks and looking for the future in the seeds of the present. Drop me a line if you would like me to speak at your next event.
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