China is rather unique in the world.
First, everyone got a mobile phone.
Then, the internet came.
And then the middle class emerged.
In that sequence.
So, you have a middle class who never had a habit
of how they shop, how they make friends,
how they get information that you could argue
was formed in the offline world.
It was birthed in the online world.
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Really for the past decade we've seen incomes in China
grow about 10%.
That is a radical change in what a household can buy.
We've seen the rise of an enormous middle class in China.
We've seen China go from low cost to high income
and we've seen China become one of the most innovative
digital markets in the world.
That's why you could really see,
you would say consumer behaviors, company business models,
many ecosystems that are unique in China
and just somewhat different than you've seen
in other parts of the world.
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When you think about this transition to the digital world,
one thing actually holds true in China that we've seen
throughout the world, which is your omnichannel customer,
that consumer that interacts and buys from your brand
or your retailer in multiple channels,
albeit online or offline, generally spends more
than the consumer who just shops on one channel.
One of the things that's quite unique in China,
and particularly the digital space in China,
is the very large ecosystems that we have.
Tencent, owner of WeChat and many other things.
Alibaba.
These are companies which have underneath them
many, many digital businesses, much broader than we see
in most Western internet companies.
If you look at e-commerce, you know what percent
of total sales goes through the platforms owned by Alibaba,
it's still close to 80%.
So, one must work with them,
but one must also think about how do I make sure
I maintain competitive advantage.
In the technology space in particular,
China is really driving innovation in hardware.
And also has an enormous talent base and set of innovative
companies at applying AI.
Companies must absolutely find the new organizational
approaches that will allow them to harness China's
leadership in AI.
This means breaking down silos, thinking about how humans
and computers work together,
not against one another, to actually drive business impact.
The need for resilience, and likely the need for resilience
in the face of not always sunny economic times,
is going to be a core part of what makes the winning
companies in China.
30, 40 years from now when we think about what's the
blueprint of a fast moving consumer goods company,
we're going to look at this decade or the '20s in China
as a period when those concepts were really formed.