21 July 2014
Senior executives at Chinese consumer companies indicate data analytics and digital strategies as key tools for business development, a recent joint survey by KPMG finds.
Tilted Global Consumer Executive Top of Mind Survey 2014, the report is jointly produced by KPMG International and The Consumer Goods Forum. It features insights from 469 senior executives from food, drink, and consumer goods manufacturers and retailers worldwide, with headquarters spanning 32 countries.
Around half (48 percent) of the Chinese firms surveyed highlighted data analytics capabilities, while 42 percent said digital strategies will be very or critically important to their companies’ businesses in the next year. Meanwhile regulatory and tax compliance topped the list (53 percent). In 2013, top priorities were R&D and innovation (55 percent), the economy and consumer demand (42 percent) and supply chain and procurement (42 percent).
Nick Debnam, Asia Pacific Chairman, Consumer Markets, KPMG China, says: “The shift in focus is imperative. The rapid proliferation of social and digital media has empowered customers as never before, prompting a retail industry that must be open to serve customers anytime, anywhere, and in any way they choose to shop.”
“In China, of particular interest are the home-grown platforms underpinning the rise of online transactions, as well as the increasingly important roles of social media and mobile devices. These trends are fundamentally reshaping the way consumers in China purchase goods and services, and how businesses operate online,” adds Debnam.
Globally, respondents show similar changes in strategic priorities. Data analytics (56 percent), digital strategy and regulatory compliance (both 54 percent) top the list. This is in contrast to the economy and consumer demand (42 percent), growth and international expansion (40 percent) and R&D and innovation (32 percent) a year earlier.
The report highlights the volume of customer data through transactions and social media, as well as new mobile and targeting technologies. These enable companies to understand and predict customer preferences. They also indicated challenges of maintaining customer trust over cyber attacks and privacy breaches.
Engaging with customers online helps manufacturers and retailers tailor their product offerings — 64 percent of Chinese firms expect their customer strategy to avail of key consumer trends in order to drive growth over the next two years.
Egidio Zarrella, Clients & Innovation Partner, KPMG China, adds: “Companies are realizing the value of information and that, if used correctly, analysis of this information can be a real differentiator. They have typically assessed historical patterns, but we increasingly see predictive analysis being used in order to determine consumer spending patterns.”
Debnam concludes: “Chinese consumers are rapidly interacting online, visiting web forums and discussing and researching brands on the internet. Digital media therefore is playing an increasingly significant role as it enables brands to interact with both existing and potential consumers. New technologies can also transform manufacturers’ revenue models, as the adoption of ‘smart’ technologies creates new revenue streams for companies.”
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