Innovation blooms in Guangdong

Women entrepreneurs help traditional manufacturing base hone its digital edge

If you think entrepreneurship in China is limited to Beijing's Zhongguancun area or Shenzhen's high-tech companies in Nanshan district, think again. Winds of innovation are sweeping parts of the Pearl River Delta in Guangdong province, which has been the base for traditional manufacturers and commercial services firms.

In a sense, the innovation wheel has turned full circle in Guangdong, and women are doing a share of the turning.

As the country's pioneer of economic reform and opening-up, Guangdong witnessed an upsurge in private sector activity in the 1980s and 1990s. Now, women entrepreneurs such as Li Hua, 37, and Zhang Xiaoling, 55, are embodying efforts to give the region's old economy a digital edge.

Li is the founder of a service provider in Guangzhou that helps private enterprises with their financial accounting, tax returns and official websites.

She quit her teaching job in Xi'an and went to Guangzhou in 2004 to help with her mother's wholesale clothing business and start her own accounting firm. In 2014, she launched a new business, an e-commerce site called Zhenhaipifa.com for wholesale markets.

Guangzhou has been South China's trade center for a long time. But many of its brick-and-mortar wholesale markets were facing a threat from e-commerce.

Li discovered wholesalers' need for professional e-commerce service around 2009 when 1688.com, Alibaba's business-to-business online platform, expanded to Guangzhou.

Many clients of Li's accounting firm wondered if she could provide similar services. But Li waited for two years as e-commerce technologies matured. She started doing research in 2012, traveling around the country to visit more than 1,000 wholesale markets.

"I don't think faster is better. I prefer to make sure every step I take is sound and steady," Li says.

Zhenhaipifa.com gives users an online tour of nearly 500 wholesale markets in 38 cities across China. As many as 22,410 individual wholesalers are registered on the site, and their locations are listed, as are their business licenses, improving their credibility.

Buyers can use the website to help them return substandard products and get refunds, resolving a major concern.

"Brick-and-mortar wholesale markets won't die, though, because buyers still regard a seller with a physical store to be more trustworthy (than online shops). Moreover, physical stores provide samples of commodities. But the markets must embrace the Internet, and adapt their business models to people's new consumption habits," Li says. "In the future, the brick-and-mortar markets may become just showrooms and after-sales service centers."

Li is not the only enterprising businessperson riding the wave of new ventures in the province.

In the early 1980s, many college graduates sought an outlet for their ambitions in the private enterprises of Guangdong. Some, such as Zhang Xiaoling, started their own businesses after doing other jobs.

After graduating from college with a mechatronics major, Zhang became a teacher at a school under a state-owned factory in Hunan province. In 1992, at age 32, she quit and headed to Guangdong, becoming an engineer in a packing machinery manufacturer.

In 1997, Zhang and her husband set up a firm to manufacture printing-and-packing machines in a run-down workshop in Zhongshan.

"Funding was the biggest headache. We put in all our savings and the rest was on credit from our clients, who trusted our expertise and ability to innovate," Zhang says.

Four months later, they made China's first high-speed multiple-shaft extruder of original design.

Zhang's startup has since grown into Sotech Smarter Equipment Co Ltd, a listed company expected to post more than 500 million yuan in gross revenue for 2015, according to a preliminary earnings report.

"As a high-tech company, Sotech is always climbing uphill with innovation as the source of our energy," she says, adding that they spend 5 to 7 percent of profits on research and development.

Zhang, vice-chairwoman of Sotech, says she is leading her R&D team to produce "China's first self-designed" printing-and-packing machines.

xujingxi@chinadaily.com.cn

(China Daily European Weekly 03/11/2016 page27)