The ever-changing business environment has urged companies to always stay agile to prepare for the unexpected. Innovation, then, becomes the main factor for companies in different industries to ensure their organic growth. The traditional industries, such as textiles and apparel, bike manufacturing, food, and even real estate, are also looking for innovations either internally or via collaboration with partners.
The latest Asia Venturing webinar on September 14, which was co-hosted by Anchor Taiwan and DIGITIMES, invited Gulshan Kumar, general manager at lululemon Taiwan, Rachel Lau, managing partner at RHL Ventures, and Marcel Yang, special assistant to CEO of Giant Bicycle, to have a conversion with Richard B Dasher, chief executive, and director at US-Asia Tech Management Center at Stanford University, about innovation in traditional industries.
Innovation has greatly influenced business
Innovation has become the foundation for companies, like lululemon, according to Kumar. As a globally well-known technical athletic apparel brand, lululemon has put a great emphasis on tech and sustainable innovations for years to develop special materials for yoga pants and outfits. Relying on the power of innovation with its supply chain partners, the company's second-quarter net revenue surged 61% to US$1.5 billion.
For Giant Bicycles, innovation has been the incremental evolutionary process improvements on the business development. It is like problem-solving and making changes to business models, to technology, and to service models, according to Yang. Innovations have brought many new trends in the past five to 10 years, such as sharing economy, e-bikes, and home exercise movement. Seeing the booming of bike-sharing several years ago, Giant participated in Youbike project, a public-private partnership between Giant as an operator/equipment provider, and local governments as the ground partner in terms of promotion and infrastructure implementation. Yang said, "Youbike provided a great example of how Giant looks at the new trends and responds to them in a way that's sustainable and also good for the public and everyone in a long term."
Lau, from the venture capital perspective, has seen a change in the way people have invested and how the corporates have innovated. RHL Ventures used to focus on the US but now focus on Southeast Asia. She saw, in the financial sector, Southeast Asia grow much faster than the rest of the world. Talent is coming back to Southeast Asia with their experiences, and more capital is also coming back to this region. In addition, the region also has a lot of young consumers. "That is why we look at food tech a lot, in particular, food security, health care, and insurance," said Lau.
Persistent on the road of innovation
To stay on the road of innovation, Kumar encouraged vendor partners or companies to be brave to take risks, embrace failures, and most importantly have patience. Before launching a new product, lululemon has to go through different kinds of test readiness levels - TRL levels, like a process of test-and-learn kind of trials - testing and iteration; reiteration, and then building trials.
"We have spent a lot of time building those relationships and connections. We try to understand each other and share each other's philosophy and businesses models," said Kumar. The vendor suppliers and brand companies both should be fully aligned with each other and their customers to achieve a win-win situation.
Kumar also advised startups that "if you can sell as a startup, if you can solve real pain points, for the large corporates, you will build a far more value for your business. And then investment conversations become a natural progression. And when done correctly, these collaborations can be mutually beneficial, and can help both parties gain a competitive advantage and ensure long term successes."
To insist on innovations, Giant Bicycle, as a global full value chain company, did an organizational innovation by creating a new and independent subsidiary called Advanced Intelligent Products, or AIPS Technology, for short, to help push the company to develop.
"AIPS Technology is much freer to engage with a wide spectrum of startups and teams, anywhere from material sciences, production technology, all the way to artificial intelligence algorithms," said Yang. "We are having different units move at different speeds, in order to catch different opportunities, so the relationship has to be connected at a very high level."
COVID stimulates new demand for innovations
COVID-19 has changed every single aspect of people's life, but also created new demands for new innovations. Lau observed many people start to encounter mental health problems because of the stress from extra workloads, such as the blurred distinction between work time, leisure time and home time. Then, corporates now are considering a solution to help their employees monitor mentor health.
Another big issue was the disruption to the supply chain. "Because of that, people in Southeast Asia didn't have enough of raw materials from the rest of the world going through the US manufacturing plants. We had a standstill in terms of that, from factories to retail stores. Retail stores couldn't get products in the hands of consumers. The consumers were met with more expensive but less quality produce." This issue pushes RHL Ventures to invest heavily in the food supply chain to create some methods to bypass the traditional retailers, by cutting down the middleman. Then, finally, it helps increase the market for farmers and decrease the cost of consumers.
(Editor's note: Asia Venturing is a series of monthly roundtables with roadmaps to the future focusing on the hype v.s. the reality of Asia's supply chain-boosted innovation ecosystem, jointly powered by Anchor Taiwan and DIGITIMES. We bring together leading industry luminaries, corporate strategists, experienced investors, and entrepreneurs to expand your network and redefine the possibilities of cross-border opportunities. The replay of the latest session can be seen on Anchor Taiwan or DIGITIMES)
(Clockwise from left) Richard B. Dasher, chief executive and director at US-Asia Tech Management Center of Stanford University; Marcel Yang, Special Assistant to CEO of Giant Bicycle; Rachel Lau, managing partner at RHL Ventures; Gulshan Kumar, general manager at lululemon Taiwan
Credit: Anchor Taiwan