Service Design for China

It’s well documented that China’s economy is rebalancing –- moving toward consumption-driven instead of investment-led growth. Fixed-asset investment growth, fueled in the past by the rapid expansion of much-needed basic infrastructure, is slowing. 

As the labor supply shrinks, incomes rise, and more families move to urban areas, demand will continue to rise for quality services. From a macro level, the opportunities for the service sector are vast; whereas the US and the UK get roughly 80% of their GDP from services, China’s share currently is only 46%. 

China will continue to rely heavily on manufacturing, exports and fixed-asset investments, but the increased wealth of its consumers, combined with rapid urbanization, will drive demand for services such as transportation, education and healthcare. Consumers not only will expect products that are more localized, but also services that cater to their individual needs and tastes much more than the past.  

Service design is a process of discovery, definition, design and delivery –- with the aim of making the resulting service useful, usable, efficient, effective and desirable. It needs to deliver value both to the customer and to the business in question. It’s an iterative process that leads to a customer-centered solution while using and complementing the strengths and capabilities of the business. 

Chinese customers want services that reflect their unique values, and that are more aligned with other Asian cultures than Western ones. But those customers are still defining what they expect from services here, sometimes valuing efficiency over quality, and other times just the opposite. Whereas designing services for Western customers is often about redefining what a good service should be, in China it is often starting from almost nothing -- defining what the service should be and balancing a higher sense of purpose and empathy with capitalism.

Creating new solutions in a rapidly evolving market has its fair share of risks, but the benefits are numerous for companies that embrace an iterative innovation approach. As more consumers move away from being purely price-sensitive and begin to recognize the value of a good experience, their lives will be positively impacted by companies that serve them better. 

In return, they’ll create the sort of goodwill and word-of-mouth advocacy that is crucial in China where consumers are highly influenced by the opinions of their friends, family and other key individuals in their lives. From a business’ perspective this can translate not only into lower customer acquisition costs, and higher loyalty and retention, but also can lead to improved efficiency through better staff/customer interaction.

If you’d like to have your team experience service design through a hands-on workshop please contact us to schedule.