Karthik Rao, Managing Director, Nielsen Greater China
Billions of dollars are spent every year researching and launching new products in China. In a recent Nielsen study of major industries, new products contribute over 75 percent of annual growth in China, which equates to 56 trillion RMB. While China is the second biggest country behind the U.S. in terms of innovation testing, multinational companies (MNCs) generate 70 percent more revenue from innovation than local companies.
More than half (56%) of local innovations are “me-too” products compared to 10 percent for MNCs. Among companies with revenue from innovation, nearly two-thirds (63%) of innovations are incremental, while only 14 percent are “me-too."
Karthik Rao, managing director, Nielsen Greater China, identified the importance of creating new ideas to help stimulate consumer demand and how companies can drive more revenue from innovation. Speaking at Nielsen’s Greater China Consumer 360 Conference in Beijing, Rao discussed a landmark study that provides a roadmap for how to increase the odds of new innovation success and outlined what successful companies are doing differently than others.
How can local companies drive more revenue from innovation? Winning big through innovation requires long-term sustainable growth, which comes from having an innovation process in place and implementing it every step of the way:
Innovative companies in China will purse breakthrough and incremental innovation rather than “me-too” products and should allow at least one year for the innovation process. Involving global expertise at later stages than early on and adopting a knowledge management system will greatly improve your chances for new innovation success.