I was recently in Shanghai, meeting with both founder-led domestic companies and global multinational companies (MNCs). During this trip, I had the opportunity to talk with the senior management team of M&G Stationery, a market leader in stationery in China. M&G was established in 1996 by cofounder and CEO Huxiong Chen. He started working in stationery at the age of 17, as a salesman. After a decade in sales, he founded the company with his brother, Huwen Chen, and sister, Xueling Chen.
During the management meeting, we got on the topic of innovation and the issues companies often encounter. Huxiong Chen noted, “Currently, M&G has a couple of small-scale innovations (less than 50 million RMB). As I consider these innovations, I realize they are really just expenses to M&G rather than real business. We are treating these innovations as a hobby, because we are not investing time to ensure that these innovations can scale.”