China’s consumer retailers and manufacturers are increasingly using data and analytics (D&A) and innovative technologies to secure a competitive advantage in a rapidly evolving market, finds a new KPMG survey.
The report, titled Seeking customer centricity - The omni business model, surveyed 400 consumer retail and manufacturing executives from 27 countries, including 39 from China and Hong Kong. It finds that companies who want to stay ahead of the competition are transforming themselves into fully-integrated omni businesses.
Three-tenths of respondents in China and Hong Kong indicated that making better use of D&A is one of their top priorities over the next two years, according to the survey conducted by KPMG International and The Consumer Goods Forum.
Jessie Qian, Partner and Head of Consumer Markets, KPMG China, says: “To remain competitive and keep customers happy in a rapidly evolving marketplace, retailers and manufacturers require a deeper, multi-dimensional understanding of their customers. China does not have legacy issues and can therefore leapfrog straight to advanced data analytics and smart technologies to track and anticipate consumer behaviour.”
Rethinking how to use D&A for deeper customer insights is the first step to getting closer to customers, and companies are planning to invest significantly in smarter analytics and technologies, the report finds.
While 29 percent of global respondents say they are currently using D&A, this proportion is expected to double to 58 percent in the next two years. The use of predictive analytics, customer paths to purchase analytics, and artificial intelligence is also expected to double over the next two years to 59 percent, 54 percent and 43 percent, respectively. Real-time tracking systems, scenario modelling and stress testing, and micro targeting are expected to see rapid pickup.
Kevin Liu, Partner, Data Analytics Consulting, KPMG China, says: “There have been a number of successful examples where data analytics has contributed to customer relationship management and precision marketing in the retail industry. There is still scope to expand. To move forward, retailers should integrate their business strategies and planning into big data applications so as to elevate the business value of data analytics.”
Qian adds: “Retailers not only need to gather but also analyse as much circumstantial, situational, and demonstrated behaviour data as possible, so as to create relevant, personalised customer experiences, optimising distribution and cost-to-serve, as well as better forecasting customer demand.”
In addition, the survey highlights that around two-thirds of executives surveyed in China and Hong Kong said they will be using D&A, telematics (i.e., transmit data wirelessly back to the company), geospatial or location-based technology and virtual reality by 2018; 55 percent indicated creating relevant, personalised customer experiences as the top priority for investment in D&A.
While technologies can help companies enhance their competitiveness, the success factors also vary in terms of the dynamics of the local market. In complex emerging markets such as China, teaming up with the right business partners can be particularly important, the report notes.
Qian concludes: “Some multinational consumer companies entering the China market create strategic alliances with innovative companies that can help them establish a footprint. For companies without the in-house talent, a partnership can be a valuable strategy. Partnerships can help bring in new ideas and business concepts, and help a traditional manufacturer or retailer make the omni business transformation.”
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KPMG International and The Consumer Goods Forum have commissioned this survey for four years in a row to help consumer industry executives better understand the ever-changing impact of industry disruptors, competition and the economy on their companies’ strategic priorities.
The executive survey was conducted online and by telephone interviews by Roubini ThoughtLab during January and February 2016. A total of 400 executives from companies headquartered in 27 countries participated in the survey. In addition, for the first time this year, 7,100 consumers from 19 countries were surveyed online by Intuit Research Consultants in March 2016.
About The Consumer Goods Forum
The Consumer Goods Forum (CGF) is a global, parity-based industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format. Its member companies have combined sales of EUR 2.5 trillion and directly employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It is governed by its Board of Directors, which comprises 50 manufacturer and retailer CEOs.
For more information, please visit: www.theconsumergoodsforum.com
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have more than 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies.
Today, KPMG China has around 10,000 professionals working in 17 offices: Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.