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Trailblazing group of Chinese companies unlocking new growth: Report

By Fan Feifei | | Updated: 2018-09-11 18:58

A small minority of Chinese companies are leading their industries and achieving higher profits by digitizing their operations and innovation processes to transform their businesses and unlock new growth opportunities, according to new research by global marketing consultancy Accenture.

The report said 7 percent of Chinese companies have become what Accenture refers to as "Rotation Champions" by generating more than half of their revenues from new businesses started in the last three years.

"Rotation Champions" substantially outperformed their industry peers, achieving, on average, a 14.3 percent three-year compound annual revenue growth rate, 5.5 times greater than the rest, which was 2.6 percent. They also secured a sales margin of 12.7 percent, compared to 5.2 percent for the others.

The digital transformation index was developed to gauge companies' digital proficiency across two critical capability sets: building intelligent operations and driving digital innovation. "Rotation Champions" scored an average of 66 out of 100 against the two capabilities, compared to the average score of 37.

These companies, which stood out in their levels of intelligent operation and digital innovation, were able to venture into previously unexplored markets while driving profound transformation of their current businesses.

The report is based on a study of 450 Chinese companies across eight industry sectors in collaboration with the China Service Alliance for the Integration of Information and Industrialization. The "Rotation Champions" are spread across all eight industries surveyed, with the automotive and consumer electronics sectors seeing the most champions among the industries studied.

"The 'Rotation Champions' are well ahead of the rest, signifying that there's a gap when it comes to how companies are investing in digital capabilities," said Wei Zhu, chairman of Accenture China.

"To close the gap, companies should invest in and deploy digital technologies at scale and at speed, and they must seek to create an agile organization with an innovation culture that will allow them to monetize new ideas," Zhu added.

According to the report, these leading companies succeeded in enhancing their digital capabilities by developing seamless digital and physical customer experiences, adopting smart manufacturing and creating intelligent functions on the operations side. At the same time, they drove digital innovation through product and service creation and established digital ventures to accelerate the creation of digital business models.

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