An autonomous car designed by Chongqing Changan Automobile Co catches attention at an auto show in Beijing. (Photo by Hu Qingming/For China Daily)
Chinese enterprises are accelerating efforts to digitalize their businesses and venture into previously unexplored fields to unlock new growth opportunities, a report by global consultancy Accenture said.
The new report said more than two-thirds of the surveyed businesses regard innovations driven by technology as their top priorities in the next two years, with the hope of increasing investment to strengthen their core businesses. Some 54 percent said they are exploring new business growth points.
Nine percent of the interviewed companies have become what Accenture calls "Rotation Champions", generating more than half of their revenue from new areas of business in the past three years, up from 7 percent of companies in that category in the previous year.
The study surveyed 221 Chinese companies across nine sectors, with the automotive segment seeing the most champions among the industries being studied.
It also found the "Rotation Champions" succeeded in making their operations and core businesses smarter, taking bold steps in venturing into new business models. These companies take "scaling the new" as a top priority in their five-year plan, while other firms only focus on improving their current operations.
These champion firms attach the greatest importance to the potential of creating disruptive growth, while others value immediate financial returns.
"Chinese companies have demonstrated great determination to digitize their organizations against the current complex business environment," said Zhu Wei, senior managing director and chairman of Accenture China.
Zhu emphasized business leaders need to achieve disruptive growth and reinvent businesses and ecosystems in a bid to stay ahead of the competition.
"The 'Rotation Champions' are well ahead of the rest in building new competitive advantages," he said. To close the gap, business leaders should drive digital transformation, grow the core business and expand into new sectors to enable themselves to achieve sustainable growth and pivot to the future, he added.
According to Jia Jin, tech group lead of Accenture China, Chinese companies should integrate research and development, production, supply chain and customer services, transform processes and operating models to unlock value in smart manufacturing.
As an example, China's biggest carmaker SAIC Motor Corp Ltd and e-commerce giant Alibaba Group Holding Ltd announced in August they will deepen cooperation to build new-generation smart vehicles.
The partners will restructure their joint venture. Alibaba's in-vehicle system YunOS will be integrated into the business of connected vehicle service provider Banma Network. They will expand the cooperation to cover businesses including autonomous driving and smart mobility.
The automobile industry is representative of Chinese enterprises trying to digitalize their operations, transform traditional business models and find new growth, said Accenture.
The consultancy has opened an innovation hub in Shenzhen and a digital hub in Shanghai this year, working with Chinese companies to practice what it calls a wise pivot by transforming their core business and scale them into new business activities.
