In a post-pandemic world, high-quality development will become a key business imperative, says Michel de Rijk, chief executive officer for Asia Pacific at S4 Capital.
In the past, China’s pursuit of high-speed growth has resulted in unbalanced development, contributing to a disparity in individual quality of life as well as digital maturity in business. The pandemic has made any development inadequacies more apparent.
“Covid-19 to my mind is a burning platform for digital disruption,” S4Capital executive chairman Sir Martin Sorrell said at CogX, the Global Leadership Summit and Festival of AI & Emerging Technology, in June. “People said about Covid-19 that it affects everybody. It does affect everybody, but not equally.”
Brian Solis, a global innovation evangelist at Salesforce, made an interesting observation on this sudden level of disruption in an interview with reporter Karen Roby on LinkedIn. Pre-pandemic, he says, “digital transformation was on everybody's minds. But it meant a million things to a million different people. What was clear was that when the pandemic struck, the digital transformation itself was digitally disrupted.”
China isn’t a stranger to transformation. In response to the Covid-19 outbreak,, 50% of adults in China said they were using grocery delivery more than they had before in April, and 25% had just started using it–quite a shift, thanks to business’s ability to deliver on an opportunity at rapid speed.
Another example of this is China’s fast, strong investment in health and wellness technology – a priority that is likely to stick for consumers in years to come. In April 2020, 32% of adults in China used telemedicine for physical health for the first time, and about just as many used it more than they had before. For mental health, 24% used telemedicine for the first time and 42% used it more.
Pre-Covid, China’s healthcare system was focused on hospital care – and with hospitals crowded with Covid-19 patients, there wasn’t a dedicated, physical place to seek treatment for other ailments. This prompted JD Health to go from 10,000 consultations a day to 150,000. Because marketplaces like JD are closely connected with the offline experience and last-mile delivery as well, JD Health was also able to deliver prescription medication, offering a service that rivalled (if not vastly improved) the treatment process.
What JD Health and other thriving businesses have offered is a people-centred approach that is squarely focused on providing more direct benefits to customers – contributing to high-quality development. Because JD Health was able to safely and conveniently provide end-to-end treatment, it’s likely that many patients will continue seeking treatment online well into the future. These healthcare options paved the way for testing and treatment at an unprecedented rate. “When you saw the second wave come in Wuhan, health workers tested 11m people in ten days. They have huge resources and can direct them tactically,” notes Sorrell.
This wouldn’t have been possible without a strong foundation of investments in innovation. “Chinese tech companies like JD.com and CloudMinds have used the coronavirus outbreak as a springboard for launching new 5G-based initiatives like service robots, unmanned vehicles and drones to eliminate human-to-human contact or deliver supplies,” according to eMarketer. “Several hospitals in the city of Wuhan were also using 5G networks for remote diagnosis during the height of the outbreak.”
Those businesses serve as great examples of how careful preparation can enhance digital transformation efforts at speed. But we've also found that brands focused on high-quality development drive even more value through a people-centered approach that significantly drives audience engagement.
For fitness brand Nike, this meant providing greater accessibility to fitness information and emotional connection while people were sheltering in place, powered by its strong foundation in technology. Despite the closure of stores in Greater China at the height of Covid-19’s spread, a 5% drop in sales was offset by more than 30% growth in digital sales there for the quarter ending February 29. The brand owes much of its success to its strong direct-to-consumer model and robust digital ecosystem.
In response to the promising numbers, Nike chief executive officer John Donahoe noted to analysts, “We now have a playbook that we can use elsewhere,” and they did just that. In other regions like the US, it has taken similar steps as in China by dropping the subscription fee for the Nike Training Club app and has offered new consumer value by working with MediaMonks to produce weekly livestreams that tap into its extensive network of fitness trainers.
China’s people-centered approach helped catapult it from a low-income economy to a medium-high one over the decades; now, businesses face an opportunity to carry that momentum and springboard change by shifting their mindset toward innovation.
Think about what this means for your brand, how services are going to change for your products and people, and what are opportunities to act differently. A recent report from Goldman Sachs corroborates this notion: “The companies whose business models fit the moment and are able to demonstrate that they can, in fact, perform well in a post-Covid-19 world begin to pull away from the rest."
Of course, Covid-19 isn’t the only transformation opportunity for brands in China. The region also faces other important digital shifts: it aims to become a leader in 5G, an ultra-fast connection that will revolutionize the way people consume content and interface with machines. And with its urban population growing rapidly, so has its population online. According to data from eMarketer, 65.6% of China’s population is estimated to be online in 2020 – growth that is expected to reach 975.1m digitally connected citizens by 2022.
As new users go online for the first time and China prepares to usher in a new era of connectivity, brands here face an incredible (and ripe) opportunity for high-quality development. For brands to truly innovate and deliver as China opens up, chief marketing officers must be prepared to drive innovation by balancing performance and creativity, wielding data strategically and imbuing virtualized experiences with emotional resonance.
Michel de Rijk is the chief executive officer for Asia Pacific at S4 Capital.