Digital transformation in China :"this is when the recipe becomes explosive, this is when the recipe becomes expensive"

By March 13, 2014
Digital Transformation

Like Tencent and Alibaba, Internet giants make a steady striving to be one step further, continuously launching innovative products linked to their spiderweb networks, aiming to trap consumers in their eco-system and succeed all the buying opportunities. Once again it was illustrated last week with Tencent last product's launch "Weixin Payments" (you can not say Wechat payments, english name, according to Tencent representative because only the Chinese version allow it) and with the virtual credit card issued by Alibaba and soon for Wechat users.

So while The Giants are becoming bigger and online players are growing faster where are standing the Multinational companies regarding digital maturity ?

Let’s first refresh our memories and jump back in time:

With a series of changes and the opining of China for foreign investments  Deng Xiaoping  led China towards a market economy  and turned it into one of the biggest and fastest-growing markets in the world in 30 years. Coca-Cola was one of the first MNC’s to start a bottle plant in Beijing in April 1981 (press review Here ) and since then China appears as the New Eldorado for International brands, from  cheap labor costs prior and market growth potential today.

Meanwhile they are still digesting this Schizophrenic turning point, The digital is bringing a new layer to implement within organizations that are still finding their ways.

And for some industries, as apparel or cosmetic, digital activities in China are worth more than a challenge but the company's heartbeat, though, this is when the recipe becomes explosive. For example,  the survival of retailers is not only depending on the way to compete with online players but  on the strategy to manage their “the digital transformation” to adapt their distribution to the impact of multichannel convergence.
MNCs need to review their entire organization and to align it if they want to achieve growth. And most of the time it involves not only human organization but also the IT infrastructure to face chinese market challenges. And this is when the recipe becomes expensive !
China is not any more a cheap market and he is turning into the most expensive one because of the viable minimum investments to develop digital activities to succeed. Of course this is only my opinion to say International companies standing on “the digital battlefield”  should invest or leave, because i definitely can promise that it’s gonna be more and more difficult if you don’t catch the digital train today in China.

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