By Summer Guo
The China growth story has been a big headline recently in business, academia and in governments around the world. And the story continues to evolve. The market has developed into a complex and sophisticated behemoth.
With that in mind, more than 600 attendees gathered at Kellogg last month for the 2015 Greater China Business Conference. “China’s Next Chapter — Future Growth Engine” focused on how China would address current challenges and fuel its future growth, laying the foundation for the country’s next chapter.
The day began with an opening keynote from Yan Xuan, president of Nielsen Greater China. Xuan shared a broad-stroke introduction to the major macro trends unfolding in China today and what they mean for businesses, both now and in the coming years. While China’s economy has slowed to 7 percent annual growth, consumer confidence has remained high, rooted in an increasingly robust middle class. The middle class Xuan described is composed of consumers that continue to move into the more expensive urban centers, travel overseas, connect on social media and do their shopping on their mobile devices.
Illustrating how these customer dynamics have played out, Xuan told the story of Costco’s market entry into China. Forgoing its well-known big box strategy, Costco opted to launch in China through a one-stop e-commerce store on Alibaba’s Tmall platform. Costco’s strategy has been to focus on selling high-quality everyday goods to an increasingly discerning and online Chinese consumer.
The discussion continued with the opening panel on retail and consumer markets. James Reiman, former EBT Mobile China CEO and chairman, moderated a conversation with Feng Xue, head of China practice and managing partner at Katten Muchin Rosenman; Winnie Yang, associate marketing director at Procter & Gamble; and Michael Zakkour, vice president for Tompkins International’s China/Asia Pacific practice.
The panelists discussed China’s growing population of 800 million consumers with disposable incomes, whose rise has squarely followed the confluence of industrialization, urbanization and e-commerce. The last of these — e-commerce — will also lay the groundwork for China’s future, both locally and internationally, according to the panel.
It is estimated that today, 75 percent of all e-commerce in China connects back to Alibaba. As Alibaba aims to invest in a global supply chain and build borderless e-commerce, the panelists said they expected to see some of the lines blur as Chinese players go abroad and international players continue to grow in China.
Take a look at the student-produced trailer for the event.
Other conference discussion featured experts from Emerson Climate Technologies, Cummins and The Paulson Institute, each bringing a unique take to their respective topics.
Bill Bosway, group vice president of Emerson Climate Technologies, explained how Emerson made environmental sustainability an essential core to its business by sharing the company’s efforts to cooperate with the Chinese government to enforce environmental regulations.
Sharad Shekhar, general manager of Cummins, showed China’s progress on sustainable development by touching on the role of intellectual property for clean technologies. Leigh Wedell, chief sustainability officer of The Paulson Institute, emphasized the challenges China’s central government faces in galvanizing cooperation from the local level.
Alex Cheng, vice president of Baidu and general manager of the company’s U.S. operation, concluded the conference, delving into the explosion of China’s mobile Internet and data creation. This trend has led to a virtuous cycle of more data, better products and smarter services. Cheng also shared insights into how a range of industries — through smart Internet usage — have found inspiration and business innovation.
More than any other trend, Chinese innovation will be the source of growth, both in the country and abroad.
Summer Guo is a first-year student in Kellogg’s Full-Time Two-Year Program. Prior to moving to Evanston, she worked in consulting at Boston Consulting Group in Shanghai. This summer, she will intern with Danaher at Beckman Coulter in Brea, Calif.