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From Corporate Lab to Open Innovation Ecosystem:Transforming Explorium for the New Retail Era

Project Overview

Client:

Fung Academy / Fung Group

Industry:

Global Supply Chain, Retail & Trading

Services:

Venture Architecture, Innovation Strategy, Organizational Transformation

Duration:

Late 2016 - 2019+

Role:

Venture Architect (Fung Academy)


Executive Summary

Explorium, the Fung Group's innovation hub in Shanghai, needed to evolve from a corporate innovation lab into an open innovation ecosystem capable of connecting startups with major commercial clients. As Venture Architect, I helped the team navigate a critical pivot that transformed their business model, culture, and operational capabilities—ultimately establishing a global network of innovation hubs and an award-winning Pilot2Scale program.


Key Results:

  • Expansion: Opened second Explorium location in Hong Kong (2018), establishing foundation for Global Explorium network

  • Award Recognition: Won International Innovation Award for Pilot2Scale program (2019)

  • Innovation Pipeline: Launched 8 pilot projects, with 5 progressing to Go-live implementation phase—including AI-powered truck routing, voice-enabled data queries, and 3D product configuration

  • Ecosystem Development: Built thriving community of innovators, entrepreneurs, investors, and business leaders across Greater China



The Challenge

Business Context

The Fung Group, a Hong Kong-based global leader in trading, logistics, distribution and retailing, has been at the forefront of supply chain innovation since 1937. Their subsidiaries—Li & Fung Limited, Global Brands Group Holding Limited, and Fung Retailing Limited—serve customers worldwide.


In 2014, Dr. Victor Fung, Chairman of the Fung Group, envisioned a new type of innovation hub to help the Group navigate the rapid digital transformation reshaping global supply chains and retail. He tasked the Fung Academy—the Group's learning and capability-building arm—with designing, building, and operating this hub, called Explorium.


Explorium opened in Shanghai in 2015 as an experimental platform for exploring disruptive technologies and business model innovations in the New Retail era in China. However, by late 2016, it had become clear that the original model—a corporate innovation lab serving primarily internal stakeholders—was too limited to achieve the ambitious vision of becoming a value-generating ecosystem for the broader innovation community.



Specific Problems

  • Closed Innovation Model: Explorium 1.0 functioned as a corporate lab with limited external engagement, preventing it from accessing the broader startup and venture ecosystem needed to drive transformative innovation

  • Cultural Barriers: The existing team had established work culture, processes, and predetermined KPIs that were misaligned with the agile, experimental mindset required for an open innovation hub

  • Partnership Misalignment: The initial lineup of corporate partners didn't provide the startup-focused connections and technological solutions needed to serve the Fung Group's business units and customer network

  • Unclear Scalability Path: No established methodology for piloting and scaling startup solutions to connect innovators with large commercial clients

  • Capability Gaps: Team lacked the skills and operational frameworks to navigate the fast-changing, uncertain environment of open innovation


What Was at Stake

The stakes were exceptionally high. Explorium represented the Fung Group's strategic bet on staying ahead of disruption in an industry being reshaped by e-commerce, artificial intelligence, and new retail models emerging from China. Failure to pivot successfully would mean:


  • Lost strategic advantage in understanding and adopting emerging technologies critical to future competitiveness

  • Wasted investment in a high-profile innovation initiative championed by the Group Chairman

  • Missed opportunity to position the Fung Group as an innovation leader within Asia's thriving startup ecosystems

  • Inability to build the capabilities needed to shape the supply chain of the future


The transformation needed to happen quickly—the team couldn't afford a prolonged period of internal focus while competitors moved faster.


Our Approach

Methodology

As Venture Architect embedded with the Fung Academy team, I approached this transformation through the lens of organizational change management combined with venture building principles. This was my first project in China, and—looking back—I'm glad I was initially oblivious to the full scope of the challenge.


The approach centered on three core principles:

  • Observe First, Act Later: Resist the urge to impose solutions immediately; instead, deeply understand the existing context, culture, and relationships before proposing changes

  • Build Trust Before Building Strategy: Invest heavily in relationship-building with internal stakeholders and external ecosystem partners to create the foundation for collaborative transformation

  • Co-Create the Future: Work alongside the team to develop the new strategy rather than presenting a pre-packaged solution, ensuring buy-in and building internal capability simultaneously


Key Phases

Phase 1: Deep Listening & Ecosystem Mapping

Timeline: First 1-2 months

  • Conducted extensive observation with minimal intervention—attending meetings, shadowing team members, absorbing the existing work culture and shared narratives

  • Facilitated 1-on-1 conversations with team members to understand individual perspectives, tolerance for change, and identify potential change champions

  • Explored the physical and cultural landscape of Shanghai and the neighborhood around Explorium to identify external partners and ecosystem connections

  • Analyzed existing KPIs, partnership structures, and operational processes to understand constraints and opportunities


Phase 2: Strategy Co-Creation

Timeline: Months 2-4

  • Facilitated collaborative strategy development sessions using frameworks including SWOT Analysis and Business Model Canvas

  • Co-created roadmap for Explorium 2.0 with team, defining new partnership model, workforce retraining needs, and startup-centric approach

  • Identified need to replace existing corporate partners and recruit new ecosystem partners aligned with open innovation model

  • Designed agile mindset and practice training program for existing workforce


Phase 3: Transformation Implementation

Timeline: Months 4-12

  • Executed transition from corporate lab model to open innovation hub with new partnership structures

  • Provided hands-on leadership coaching to team members navigating the cultural and operational shifts

  • Built connections with startups, incubators, accelerators, and venture capitalists throughout Shanghai and Greater China

  • Developed initial framework for connecting startups with Fung Group business units and commercial clients


Phase 4: Scaling & Global Expansion

Timeline: 2017-2019+

  • Partnered with Richard Kelly, Fung Group's Chief Catalyst, to design Global Explorium—a worldwide network of innovation hubs

  • Developed and refined Pilot2Scale methodology for systematically testing and scaling startup solutions with commercial clients

  • Created operational playbooks and frameworks to support continued evolution

  • Supported launch of Explorium Hong Kong (2018)



Why This Approach

Traditional consulting approaches—arriving with a pre-defined strategy deck and implementation plan—would have failed in this context. The Explorium team had already been operating for over a year with established relationships, culture, and processes. Imposing change from outside would have triggered resistance and failed to build the internal capabilities needed for long-term success.


The 'observe first' approach, while counterintuitive and initially uncomfortable, proved essential. It allowed me to:

  • Understand the team's actual challenges rather than assumed problems

  • Identify natural change champions who could drive transformation from within

  • Build trust that enabled honest conversations about difficult changes

  • Map the external ecosystem to identify the right partners for the new model


Co-creating the strategy—rather than presenting a finished plan—ensured the team developed ownership of the vision and built the strategic thinking capabilities they'd need to continue evolving Explorium long after my engagement ended.


The Solution

What We Built

The transformation resulted in Explorium 2.0—a fundamentally different organization operating as a true open innovation ecosystem rather than a closed corporate lab.


Key components of the new model:

  1. Open Innovation Ecosystem

    Explorium became a value-generating platform where businesses, startups, incubators, accelerators, and venture capitalists collaborate to explore disruptive technologies reshaping global supply chain and retail. Rather than serving only internal stakeholders, Explorium now connects diverse innovation actors across the Greater China ecosystem.

  2. Startup-Centric Partnership Model

    We pivoted from corporate partnerships to startup-focused relationships, making early-stage technology companies the primary drivers of innovation. This shift gave Explorium access to cutting-edge solutions in AI, voice recognition, 3D visualization, and predictive analytics that could be piloted with Fung Group business units.

  3. Pilot2Scale Methodology

    A systematic approach for connecting startups with commercial clients, testing solutions in real business contexts, and scaling successful pilots to full implementation. This methodology became the operational backbone of Explorium 2.0 and later won an International Innovation Award.

  4. Transformed Team Capabilities

    Through retraining and hands-on coaching, the team developed agile mindsets and practices, learning to operate comfortably in uncertain, fast-moving environments. Team members gained skills in ecosystem building, startup evaluation, experiment design, and iterative learning.

  5. Global Expansion Framework

    Designed Global Explorium vision and operational model for replicating the innovation hub across multiple geographies, enabling the Fung Group to tap into thriving ecosystems beyond Shanghai—starting with Hong Kong and the Greater Bay Area.



Solution Highlights

Pilot2Scale Program Success

The Pilot2Scale methodology became Explorium's signature capability, enabling systematic validation of startup technologies in real business contexts. The program's success metrics speak for themselves: 8 pilots launched with 5 reaching Go-live implementation—a 62.5% success rate far exceeding typical corporate innovation outcomes.


Notable pilot projects included:

  • AI-Powered Logistics: Optimizing truck routing using artificial intelligence to reduce costs and improve delivery efficiency

  • Voice-Enabled Analytics: Simplifying and speeding up data queries using voice recognition technology, democratizing data access across the organization

  • Smart Quality Control: Enabling intelligent QA/QC data entry using language recognition technology

  • 3D Product Visualization: Utilizing 3D product configuration in hardline sourcing to accelerate design decisions

  • Predictive Planning: Improving production and merchandising planning through predictive analytics and AI


Ecosystem Building & Community Development

Built a thriving, dynamic community of innovators, entrepreneurs, investors, business leaders, and academics who continuously share ideas, engage in thought-provoking conversations, and support new concepts. This community became one of Explorium's most valuable assets—a self-sustaining network effect that continues generating opportunities and connections.


Operational Playbooks & Frameworks

Created comprehensive documentation including the Book of Experiments, Incubator Model frameworks, and operational guides that codified best practices and enabled knowledge transfer as Explorium scaled.


Team & Collaboration

As Venture Architect embedded with Fung Academy, I worked directly with the Explorium operational team through a deeply collaborative model. This wasn't traditional consulting—I functioned as an extended team member while bringing external perspective and venture building expertise.


The collaboration evolved through multiple modes:

  • 1-on-1 coaching: Personalized guidance for individual team members navigating new responsibilities and challenges

  • Group strategy sessions: Facilitated workshops using business frameworks to co-create the Explorium 2.0 vision

  • Informal ecosystem building: Joint exploration of Shanghai's innovation landscape to identify partners and opportunities

  • Leadership partnership: Close collaboration with Richard Kelly, Fung Group's Chief Catalyst, on Global Explorium strategy and Pilot2Scale development


The embedded model proved essential—being present in Shanghai, experiencing the local context firsthand, and building authentic relationships with both internal stakeholders and external ecosystem partners created the trust and cultural understanding necessary for successful transformation.


Results & Impact

Quantifiable Outcomes

Innovation Pipeline:

  • 8 pilot projects launched through Pilot2Scale program

  • 5 pilots (62.5%) progressed to Go-live implementation phase

  • Multiple technology domains validated: AI, voice recognition, language processing, 3D visualization, predictive analytics

 

Geographic Expansion:

  • 2 locations operational by 2018 (Shanghai + Hong Kong)

  • Global Explorium framework designed for network expansion across multiple geographies

 

Recognition & Awards:

  • International Innovation Award (2019) for Pilot2Scale program

  • Industry recognition as world's first retail business model testing platform (2015 launch)

 

Capability Building:

  • Full team transformation from corporate lab mindset to agile innovation practitioners

  • Sustainable operational model with frameworks and playbooks enabling continued evolution


Business Impact

Beyond the quantifiable metrics, Explorium's transformation created profound organizational and strategic impacts:


Strategic Positioning

Explorium established the Fung Group as an innovation leader within Asia's most dynamic startup ecosystems. Rather than watching digital transformation from the sidelines, the Group gained direct access to emerging technologies and business models reshaping their industry. This positioning provided competitive intelligence and early-mover advantages in adopting game-changing innovations.


Cultural Evolution

The transformation rippled beyond Explorium itself, influencing how the broader Fung Group approached innovation. Success stories from Pilot2Scale pilots demonstrated that startups could deliver real business value, breaking down skepticism about external innovation. The agile, experimental mindset cultivated in the Explorium team began spreading to business units engaged with the pilots.


Ecosystem Influence

Explorium became a recognized node in Greater China's innovation ecosystem, attracting startups, investors, and corporate innovators. The community that formed around Explorium created network effects—connections made at the hub led to partnerships, investments, and collaborations that extended far beyond the Fung Group's immediate interests.


Capability Platform for the Future

Perhaps most importantly, the transformed Explorium equipped the Fung Group with capabilities to continuously evolve. The team learned to navigate uncertainty, rapidly test new concepts, and build bridges between established business operations and emerging startups. These capabilities remain relevant regardless of which specific technologies or business models emerge next.


Client Testimonial

Yaniv has made significant contributions to our innovation initiatives, including our Explorium innovation platform in Shanghai, the GBG Innovate project at Global Brands Group in New York, and the development of the Artificial Intelligence curriculum at Fung Academy. His extensive knowledge and expertise in technology resources and AI have been invaluable to these projects. We are thoroughly impressed by his continuous willingness to share his expertise and insights with the project teams. Yaniv's dedication and willingness to collaborate have been commendable throughout the process. Joanne Ho COO, Fung Academy

 

Key Takeaways

Lessons Learned

  1. Observation Before Intervention

    In organizational transformation, the temptation to immediately propose solutions is strong—especially when leadership expects quick results. However, the Explorium project reinforced that time invested in deep observation and relationship building pays exponential dividends. The month I spent 'doing nothing' was actually the most valuable phase of the engagement—it enabled me to understand the real challenges (not assumed problems), identify natural change champions, and build the trust necessary for difficult conversations.

    This lesson applies broadly: when entering any established organization or ecosystem, resist the pressure to act immediately. Listen first, build relationships, and understand the existing culture before attempting to change it.

  2. Co-Creation Builds Capability

    Traditional consulting delivers a strategy deck that the client must then figure out how to implement. The Explorium approach—working alongside the team to co-create the strategy using simple frameworks—took longer but created two crucial outcomes: genuine team ownership of the vision and development of internal strategic thinking capabilities.

    The team didn't just receive a new strategy; they learned how to think strategically about innovation. This capability enabled them to continue evolving Explorium long after my engagement ended—as evidenced by their continued success with Pilot2Scale and expansion to Hong Kong.

    For venture architects and innovation consultants: Your job isn't just solving the immediate problem—it's building the client's capability to solve future problems themselves.

  3. Ecosystems Matter More Than Technology

    A key insight from Explorium's transformation: The specific technologies being piloted (AI, voice recognition, 3D visualization) mattered less than the ecosystem of relationships connecting startups with commercial opportunities. The Pilot2Scale program's success stemmed from its ability to bridge fundamentally different worlds—early-stage startups and established enterprise operations.

    Building and nurturing this ecosystem—identifying the right partners, establishing trust, creating frameworks for collaboration—proved more valuable than any individual technology solution. This ecosystem became a sustainable competitive advantage that continues generating value regardless of which technologies rise or fall.

    For corporate innovation leaders: Invest at least as much energy in ecosystem building as in technology evaluation. The relationships and trust you cultivate will outlast any specific technology trend.

 

Broader Implications

The Explorium case study illuminates several broader trends and opportunities relevant to established organizations navigating digital transformation:


The Rise of Open Innovation Ecosystems

Explorium's evolution from closed corporate lab to open innovation hub reflects a broader industry shift. Traditional R&D models—where companies develop innovations internally—increasingly struggle to keep pace with external innovation velocity. Organizations that build bridges to startup ecosystems, accelerators, and venture communities gain access to innovation happening outside their walls.


We're seeing this pattern replicate globally: corporate innovation hubs transitioning from internal focus to ecosystem orchestration. Explorium provides a proven playbook for making this transition successfully.


Asia as Innovation Laboratory

Explorium's location in Shanghai proved strategic. China's New Retail revolution—blending online and offline commerce, leveraging AI and mobile technology—is pioneering business models that will shape global retail. By positioning Explorium within this ecosystem, the Fung Group gained early exposure to innovations that will eventually reach Western markets.


Companies seeking to understand the future of commerce, logistics, and consumer behavior should consider establishing similar presence in Asia's leading innovation hubs.


The Pilot2Scale Gap

Many organizations struggle with the 'valley of death' between innovation pilots and scaled implementation. Explorium's Pilot2Scale methodology—systematic enough to be repeatable yet flexible enough to accommodate different technologies and business contexts—addresses this widespread challenge.


The 62.5% success rate (5 of 8 pilots reaching Go-live) significantly exceeds typical corporate innovation outcomes. Organizations seeking to improve their innovation hit rates should examine the Pilot2Scale approach: clear success criteria, rapid iteration, close collaboration between startups and business units, and willingness to fail fast on non-viable concepts.


Related Capabilities

This project showcased expertise in:

  • Venture Architecture - Designing and building new business models from concept through commercialization

  • Innovation Strategy - Developing frameworks for systematic exploration and validation of emerging opportunities

  • Organizational Transformation - Leading cultural and operational change in established organizations

  • Ecosystem Building - Creating and nurturing networks connecting diverse innovation stakeholders

  • Startup-Corporate Partnership Models - Designing frameworks for productive collaboration between startups and enterprises

  • Leadership Coaching - Developing innovation leadership capabilities in executives and team members


Interested in similar results for your organization? Visit https://www.startupsystems.io to discuss your innovation transformation.


Project Links & Resources


Document Version: 1.0

Last Updated: February 2026

Author: Yaniv Corem

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