TRANSFORMATION AND INNOVATION OF CHINESE ARTIFICIAL CRAFT PRODUCTS IN THE AI ERA: A FIELD CASE STUDY OF AN EXPORT MANUFACTURER

Chinese manufacturers of artificial flowers and other artificial craft products face slower demand, more cautious overseas buyers, and stronger price competition in the years after the COVID-19 pandemic. This paper presents a field case study of HappyArt, a business-to-business exporter of artificial flowers, plants, and potted plants with nearly twenty years of history. The evidence comes from a two-week on-site internship in July 2026, together with company materials and information shared by managers. After a strategy meeting in January 2025, the firm innovated along three lines. In products, it raised the share of varieties made with 3D printing and AI-assisted color screening from about 10% to 60%, increased annual design-patent applications from at least four to at least twenty, and offered 60 or more colors per product. In the market, it replaced paid sampling with customer co-creation and absorbed the sampling costs, about 5% of annual expenses. In organization, it introduced weekly cross-departmental meetings and a “Your Eyes in the Factory” reporting practice. Management reports that the 3D+AI product line grew by about 20% in 2025 and expects similar growth in 2026, while many competitors contracted. The case suggests that, for labor-intensive craft manufacturers, incremental innovations that reinforce one another may be more practical than disruptive change. The main limitations are the single case, the short observation period, and the use of company-reported figures.