China is taking a global lead in two areas of innovation: in improving consumer products and the business models used to sell them; and in making manufacturing processes cheaper, quicker and better. Chinese firms now outsell foreign rivals in categories such as household appliances, Internet software and consumer electronics.
China has also been innovating new business models in the advertising industry, which is only one-eighth the size of America’s. While Western online firms generate most of their revenue from advertising, Chinese tech firms have had to find new ways to monetize consumers time spent online. For instance, Tencent (a giant that could potentially rival the likes of Facebook and Amazon) generates 90% of its revenue from online games, sales of virtual items on social platforms and e-commerce. Lessons can be learned from how Chinese firms are able to integrate all of these aspects to create an amazing user experience.