"Make it" in Shenzhen - 3 compelling reasons to start a business in Shenzhen
Shenzhen, a fishing village with 30,000 inhabitants 40 years ago, now has a population of 12 million and is recognized as the “Silicon Valley of China.” Innovation is in Shenzhen’s genes. Shenzhen was the first city in China to be named a National Self-Innovation Demonstration Zone and is forging to become an international innovation center for science and technology. The city now holds a leading position in fields such as electronic information, the internet, bioindustry and new energy. Shenzhen is home to Huawei, ZTE, Tencent, BYD Auto, BGI, DJI, Kuang-chi, Royole and a wide array of other high-tech enterprises, making it a true capital of innovation. And our question today is: What makes Shenzhen so special for startups?
Costs and availability
The first element to look at is the costs and availability. Take the Huaqiangbei electronics market, which is a world’s major electronics trading hub, as an example. Hanging out in such “maker playgrounds,” seeing components and talking to production experts in the city make life a lot easier for startups. You also get a feeling for what is possible and what is critical to get an idea from 0 to 1 and then to n - mass production. Such mass-market production knowledge is a great asset that you don’t often find in many countries in the western world.
Speed and reliability
Having the whole production infrastructure nearby not only speeds up the whole process, but it also means prototyping and production costs are significantly lower in China compared to that in Europe or in North America. Compared to Switzerland, where it takes 9 months to make a prototype, it will only take 3 months or less in Shenzhen to make one. It is easy to see why - in many western countries, companies have to order different components from different suppliers, then get them shipped. The majority of production time is spent on shipping. Being able to take the product to the market as soon as possible is critical for startups. Once it is on the market and hits, it is critical to have a robust supply chain, because nothing is worse than having a hot seller you cannot deliver. Shenzhen offers both - speed and reliability.
The city has a complete ecosystem for startups in place. There are various makerspaces providing open source factories for startups, where there are prototyping workshops with production level equipment, space and consulting services. The makerspaces also help link startups to manufacturing recourses. These workshops offer startups the advantage of being the first mover in the market. For startups, every penny counts. Timing and pricing are the keys to become successful. Shenzhen has a complete ecosystem that contains everything needed for all stages of tech production all in one place.
Shenzhen (an overview)