Case Study: Ji’an Project

July 11, 2022

Ji’an, located in the central part of China’s Southeast Jiangxi province, is a symbolic city of Jiangxi culture and an important cradle of the Chinese revolution.

In the past decade, the total GDP of Jiangxi province has increased from less than 900 billion yuan in 2011 to more than 2.5 trillion yuan in 2020.

During this period, Ji’an ushered in economic transformation, innovative development and poverty alleviation, and the urgently needed strong support from high-end entrepreneurial talents. This also provided a good entry point for Cheung Kong Graduate School of Business to give back to society with its long-standing experience in research.

On the occasion of the 90th anniversary of the establishment of the Jinggangshan Revolutionary Base in 2017, CKGSB has cooperated with the Ji’an municipal government to build a platform for the integration of local entrepreneur resources and talent development, exploring a new path of social innovation that integrates government, industry, local enterprises, and CKGSB’s alumni ecosystem.

The project has been carried out for five consecutive years, and benefited more than 150 local entrepreneurs, some of which have developed into listed companies, and have made important contributions to the economic and social development of Ji’an.

Guoguang Commercial Chains

Headquartered in Ji’an, Jiangxi Guoguang Commercial Chains Co., LTD (referred to as “Guoguang”) is a local supermarket chain established in 2005.

2018 was a defining year for Guoguang’s future development. At a time when the company was considering to go public, it was facing many challenges from the rise of the new retail environment and e-commerce. The company faced the problems on how to stay competitive under changing market demand and increased competition from e-commerce; while also better integrating into the capital markets and taking the company on to a new stage of development.

In the same year, Jiang Shulan, founder of the company, decided to enroll on the senior entrepreneurial training program established by CKGSB, with the support of the Ji’an municipal government. While studying, Jiang also began to prepare for Guoguang’s stock market listing.

During the three years of preparation for the company’s listing, Jiang said it was because of the help and guidance from CKGSB professors and the local government that enabled the listing to go ahead.

CKGSB integrates capital literacy into its system of cultivating outstanding entrepreneurs. Via curriculum design and face-to-face interaction, the school accelerates the process of an enterprise’s stock market listing and long-term development through training in capital operation and knowledge of equity markets.

In addition to major upgrades to the capital model, Jiang continued to promote the classification and accurate positioning of Guoguang stores, and to transform and upgrade the retail model to better serve a wider scope of consumers. The following are step she took:

  • Accelerating the integration of digital business trends, integrating online and offline store
  • Adding advanced equipment such as self-service cash registers in offline stores to make shopping easier and more convenient for customers.
  • Monitoring how seasonal changes affect customer needs.
  • Renovating and upgrading some stores to optimize product categoriazation.

Through an innovative business model and management reform, Guoguang achieved an average annual operating income of more than 2.2 billion yuan, as well as a total market value of 3.9 billion yuan.

In recent years, in order to promote poverty alleviation, common prosperity and rural revitalization, Guoguang has continuously designed a unique model of social innovation.

For instance, Guoguang has sent its employees to remote rural areas, particularly those designated poverty alleviation areas, to assist in the establishment of agricultural production bases. By connecting farmers through rural cooperatives, it permitted local farmers to increase the scale and standardization of their agricultural products, which will be purchased by Guoguang. So far, Guoguang has accumulated more than 2,000 cooperative suppliers.

During the Covid-19 pandemic, Jiang actively campaigned to ensure that Guoguang did not close its stores, nor halt supplies or increase prices. After the pandemic restrictions were eased, Guoguang expanded its business development model by connecting with local vocational and technical colleges to provide internship opportunities. It not only helped create more employment opportunities, but also solved its own labor shortage problems.

Social Innovation in Various Industries

Entering a new stage of development, it is important to persist in working together to promote high-quality development, and to mobilize the enthusiasm of the whole society in order to improve the professional skills and the quality of the workforce.

In Ji’an’s path towards high-quality development and social innovation, a number of highly innovative startups and industrial cooperatives have emerged.

CE-Link Ltd

CE-Link is a leading manufacturer of phone accessories and cables. Since settling in Anfu county, Ji’an in 2009, the company has built its own industrial park, and created a consumer electronics product business group that integrates technology research and development, customized production as well as sales and services.

In August 2019, the company was listed on the Growth Enterprise Market of the Shenzhen Stock Exchange and became the first company from Ji’an to go public.

Xiao Han, executive manager of CE-Link, put forward his thoughts more on the future development of the company after attending CKGSB’s program.

“Studying at CKGSB has broadened my horizons,” he said. “It can lead us to think about the possibility for cooperation between upstream and downstream industries as well as the integration of commercial resources.”

From entering the global market to its listing, CE-Link pays more and more attention to the integration of its industrial chain and derived social impace. For example, its listing has attracted more suppliers to Anfu, gradually driving the development of upstream and downstream enterprises across industrial parks in Ji’an. Such development has contributed to Ji’an’s employment growth and industrial competitiveness.

Meanwhile, CE-Link also actively fulfills its social responsibilities. For example, it was the first company to introduce an environment-friendly model in its production process. This not only provides local employment and tax revenue, but also contributes to green development.

Health industry in Xiajiang county: Resource integration from farmers to pharmaceutical companies

In 2017, Ji’an issued a document to accelerate the development of its health industry by building an integrated industrial cluster with biopharmaceutical manufacturing as its core.

With the help of government subsidies and guarantee support as well as unique ecological resources and location advantages, many local biopharmaceutical companies in Xiajiang county are exploring new ways to develop biopharmaceuticals through highly innovative models.

Xiajiang county has now formed an operation model consisting of enterprises, cooperatives and farmers. As of the end of 2020, more than 100 bio-pharmaceutical companies have settled in the county.

Ji’an model: Greater Potential Ahead

CKGSB’s Ji’an program has built a platform for companies to communicate and cooperate with other companies, governments and social institutions. It has also created a unique and socially innovative model by trying together the upgrading of enterprises with regional and social development.

The core of social innovation is to integrate various social resources through cross-border collaboration to seek solutions to major social problems. How then can the Ji’an model of social innovation be further promoted? What experiences can be learned from the model?

  • First, local governments need to create a suitable business environment.
  • Second, industrial policies should be precisely planned, and industrial cooperatives should adapt to local conditions.
  • Third, leading enterprises should cooperate and combine resources.
  • Fourth, relatedsectors should take advantage of experts and professional talents.

The success of the Ji’an model is not the end of a story, but a new starting point. For CKGSB, Ji’an’s socially innovative model reflects its innovative approach to management education.

At present, CKGSB has replicated this project model in Hengshui, Hebei province, and hopes to promote this inclusive and socially innovate model in more underdeveloped areas in the future, in order to contribute to rural revitalization, common prosperity and regional development.