Territory agricultural products face competition from other Australian exporters along with growers in China. Cosmetic and natural health products, such as Kakadu Blue Cypress oil, face a formidable wall of Chinese traditional medicine products.

Adding to this competitive pressure is the way China has shifted from imitation to enhancement and now to innovation, so competition becomes more intense as Chinese innovation increases.

To remain competitive we need to develop a more sophisticated understanding of what constitutes innovation. NT business can also learn from the strategies used by Chinese companies to expand their markets because it’s no longer just about price.

Increasingly we are seeing a significant trend in the growing global influence of Chinese brands. The smart strategies driving their domestic and global success are strategies that Northern Territory developers need to counter – or emulate.

The global expansion strategy for Chinese companies has three key components.

The first is quality. Companies look to develop a reputation for producing reliable, high-quality products at competitive prices. This is the key to winning over consumers worldwide.

The second is strategic social media marketing, which is the key to both domestic and global success. Reputation is leveraged through effective use of social media platforms. It’s this use of social media platforms by Chinese companies to target selected audiences that offers a template for NT businesses to follow. There are some skilled consultancies in Australia that can help with China social media strategies that go beyond TikTok, XiaoHongShu and Douyin.

The key selling pitch and motivator is personal recommendations from users posted on a wide spread of social media platforms. In an environment where counterfeits and shoddy lookalikeproducts are a constant threat, it is the authenticity of social media recommendations that increase both brand awareness and sales.

The third is recognising the change in the market environment. China’s domestic market was once a testing ground for global brands. Now it is an incubator for innovative companies with global ambitions. In today’s interconnected world, brand value is more important than product origin. NT-Made is no longer as powerful as a point of origin brand selling tool in China.

Products such as Arnhem land bush cosmetics have an important point of origin advantage, but without a brand value, the market penetration in China is limited. Cracking the China market requires innovative thinking.

Often we think of innovation as synonymous with invention, which rests on research and development. Coming up with a new invention is an exceptionally difficult task. Certainly innovation can come from new inventions, but most innovation comes from the application of the new inventions.

The innovation of adding smart features to a phone has completely changed the social and commercial environment. WeChat and Facebook did not invent the smartphone, but they innovated on this platform to expand the possibilities.

Innovation is both an opportunity for any business and a competitive threat. Opportunity because your business can innovate on the back of existing products and services. No need to invent something new. Innovation is a competitive threat because others are doing the same and this threatens to leave NT products behind with a diminishing market share.

Writing in CHINAFY, Joanna Hutchins discusses nine catalysts that business can apply to emulate the way China is able to innovate so successfully. She discusses these catalysts as ways for Western business to improve, drawing on companies as diverse as Haier and ByteDance. In a sense, this discussion falls into the same category as management books from the 1980s that tried to apply the lessons of Japan’s business success to lagging Western business and management practices.

The important difference between then and now is that in the 1980s there was little appetite for Western business to penetrate the Japanese market. Today the dream for many businesses is to develop a significant market in China. However, success can no longer rest on the premium attached to foreign products.

Hutchins writes: “It’s not just about creating new products to sell in the same old ways and through the same systems; it’s about looking holistically at every piece of the supply chain and route to market and finding new ways to iterate in the system itself.”

It’s a significant observation because it defines how Northern Territory business can enter the China market, and retain market share. The competitive advantage may come from adding blockchain certification to consumable products such as Green Ant gin to assure the customer that product substitution has not taken place.

On the other side of the coin, it also clarifies the global threat that Chinese innovation poses to existing business methods. The Chinese approach to innovation is a new template for business development.

Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for more than a decade. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia China Business Council. The views expressed here are his own.