Foreign Firms in Shanghai Transform From Sales Hubs to Innovation Engines

A growing number of international companies in Shanghai are fast-tracking their transformation, moving beyond their traditional roles as management, sales and service centers to become innovation as well as research and development hubs. Their aim is to build a full chain linking local innovation, commercialization, corporate upgrading and industrial advancement.

Sanofi China will establish a new R&D center in Shanghai’s central Jing’an district, marking a comprehensive strategic upgrade of its existing China R&D operations, Tang Lei, head of translational medicine at the French pharmaceutical company’s China arm, said at a recent conference on foreign trade transformation and upgrading in Shanghai.

The new Shanghai center will become Sanofi’s largest translational medicine hub in China, closely connected with its six other translational medicine centers in other parts of the world. Leveraging Shanghai’s world-class scientific research resources and open policy environment, the hub will accelerate drug development in key areas such as immunology, chronic diseases, oncology and rare diseases.

The Paris-based company also plans to promote the simultaneous global development of new drugs and prioritize first launches of innovative medicines in China so as to accelerate access to cutting-edge treatments in key areas for Chinese patients.

Clarins will locate its first overseas laboratory, and its second-largest R&D center in the world, in Jing’an, said Song Xianli, director of research and development at the French beauty and health company. The center will focus on Chinese consumers’ skin needs, from texture and fragrance to packaging, work with its Paris headquarters to develop products better tailored to the local market and drive localized innovation.

Jing’an is now home to 148 multinational headquarters and over 6,100 foreign-funded enterprises, making it one of the most concentrated hubs for global brands in Shanghai, said Zhao Lantian, deputy director of the Jing’an District Commission of Commerce.

However, with the changes in international trade and China’s push for higher quality growth, the traditional model of “heavy on sales, light on R&D” is no longer sufficient, making the transformation and upgrading of foreign trade firms an inevitable choice, he added.

To this end, Jing’an is focusing on three key sectors, namely biomedicine, beauty and wellness, and high-end consumption, using R&D-driven innovation to overcome transformation challenges and make innovation the core driver of upgrading foreign trade enterprises.

Hiking investment in R&D not only strengthens companies’ core competitiveness and operational efficiency, but also boosts regional economic growth and improves the industrial ecosystem to create a win-win situation for both businesses and the local economy, Zhao said.