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Transform or Be Disrupted
May 10, 2018
Shanghai
Presentation by Dr. Edward Tse
Founder & CEO, Gao Feng Advisory Company
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Gao Feng Advisory Company
A mega meeting point
2
Technology China
Source: Gao Feng analysis
Gao Feng Advisory Company
China’s digital landscape at a glance
3
772MTotal Internet users in
China (Dec 2017)
USD 25.3Bn
(GMV sales on Alibaba
Singles’ Day 2017)
753MTotal mobile Internet users
in China (Dec 2017)
200+Global cities with Mobike
operations since April 2016
450MDidi users across
400+ cities in China (2017)
980MMonthly active users*
on WeChat (Sep 2017)
Note: *Combined MAU of Weixin and WeChat; Numbers are latest published figures
Source: CNNIC; Literature research; Gao Feng analysis
Gao Feng Advisory Company
New shifts
4
Source: Gao Feng analysis
Middle Class Technology Communications
“New Rural” “New Retail” Globalized Resources
Gao Feng Advisory Company
In China’s Disruptors, we chronicle power of
the Chinese entrepreneurs
5
The real force in Chinese economy is
increasingly private companies, not
SOEs
Leading private Chinese companies
are innovative and ambitious
They are changing not only China
but increasingly also the rest of the
world
Key Themes (book released in July 2015)
Five of the best new books on
innovation
– China’s Disruptors’ public
recognition by Fortune.com,
April 2015
“ ”Follow Us
Gao Feng Advisory Company
Geely: from a vehicle manufacturer to a
transportation services provider
6
Passenger Vehicle
1997
The first privately owned
car company in China
Premium Passenger
Vehicle
Aug. 2010
Acquired Volvo Cars
Taxi
Feb. 2013
Acquired the London Taxi
Company (Renamed as London
Electric Vehicle Company, now
under Geely’s new energy
commercial vehicles division)
Oct. 2016
Launched Lynk & Co., a connected
car brand providing personalized
mobility services to young buyers
Vehicle Connectivity
Financial ServicesMay. 2017
Invested in Saxo Bank, a pioneer
in global FinTech innovations
Ride HailingNov. 2015
Launched Caocao, a
NEV ride hailing platform Electric Vehicle
Oct. 2017
Launched Polestar, a
premium EV brand,
using subscription model
Flying CarNov. 2017
Acquired Terrafugia, the first
flying car company in the world
Vehicle Technology
Feb. 2018
Purchased a 9.7% stake in Daimler,
aiming to strengthen electric and
autonomous vehicle technologies
Commercial Vehicle
Dec. 2017
Acquired 8.2% stock
shares of AB Volvo,
strengthening Geely’s
truck and bus business
CASE EXAMPLE
Source: Baidu Baike, Sohu Auto, Geely official website, Gao Feng analysis
Gao Feng Advisory Company
Rise of New Retail
7
CASE EXAMPLES
Source: Gao Feng analysis
Mobile APP-powered
offline experience
“Eat as you shop”
model
30-min guaranteed
delivery service
(within 5km living
circle)
24/7 cashier-free
convenience stores
and unmanned
snack bars
Sensors to track
inventory and
customer in-store
movement real-time
Hema Fresh
盒马鲜生
Yonghui
Superstores
永辉超级物种
JD.com
7Fresh
Xingbianli
猩便利
BingoBox
缤果盒子
TaoCafe
淘咖啡
Gao Feng Advisory Company
The fundamentals of retail are being reshaped
8
Consumers Products Retail Stores
Limited consumer data
and insights
Data silos
B2C mass production
Product-centric,
transaction-driven
Traditional retail
formats limited by
physical constraints
Data-driven dynamic
consumer profiling
Personalized products
and services
C2M mass
customization
Integrated products and
services experience
Seamless integration of
online and offline retail
Reimagining new
shopping scenarios
Status
Quo
New
Retail
Source: Gao Feng analysis
Gao Feng Advisory Company
New consumer dynamics and tech enablers are
transforming the manufacturing sector
9
Source: Gao Feng analysis
Product and service innovations based on market data analytics
Order-based production
Smart factory with high automation
AI-powered analytics
Human-robots collaboration
Mass customization
Connectivity
Precision marketing
Online merging with
offline (OMO)
Predictive demand forecasting
Real-time inventory tracking
R&D Manufacturing Products Supply Chain Retail Consumers
An end-to-end holistic digital transformation is required for the future era of C2M manufacturing
B2B?
B2B2C?
C2B?C2M?
Gao Feng Advisory Company
The future of manufacturing will need to be more
customer-driven across the entire value chain
10
Future C2M
Customer-centric Value Chain
Traditional B2C
Manufacturer-centric Value Chain
Focus on users
(potential
consumers) not
just customersOmni-channel
marketing
Co-creation
with usersProduction
R&D
Service Sales
MKTEnd-
users
Targeted sales;
Personalized offerings
Focus on customers
experience not CRM
Users participate in every stage of production
Flexible production and open supply chain
Rapid response to market dynamics enabled by technologies
Mass
customization;
Order-based
production
Source: Gao Feng analysis
Procurement
Production
Supply Chain
Sales and Marketing
End-users
Closed chain production
Distant from end users
R&D
Gao Feng Advisory Company
Manufacturing will be AI’s next frontier
11
Source: Gao Feng analysis
Predictive
Maintenance
Digital Twin Factory
AR/VR Tools Advanced Automation
Collaborative
Robots
Real-time Supply
Chain Management
Robo-advisors/
Virtual Service Agents
Prescriptive insights
Enhance visibility into
shop-floor operations
Improve quality control
and yield
Minimize unplanned
downtimes
Automate risky activities
Reduce inventory costs
with better forecast
model
Enhance revenue with
better sales lead
identification
Benefits
AI-enabled Manufacturing Technologies
EXAMPLES
AI-based Visual
Quality Inspection
Cognitive Procurement
Gao Feng Advisory Company
Organization structure will also need to be
adjusted to cope with disruptions
12
ILLUSTRATIVE
. . . Frontline Platform:
Innovative, agile and customer-centric small units/teams
Backend Platform:Basic infrastructure,
Investment committee, strategic decision making
Middle Platform:Shared capabilities,
supporting functions, open architecture
Marketing
Supply
ChainTechnology
Data &
Analytics Others
Frontline Platform:
Self-operating and
nimble frontline
operation teams
Middle Platform:
Shared services
platform to empower
vertical business
units
Backend Platform:
Infrastructure
development, top-
level strategy design
BU 1 BU 2 BU 3 BU 4 BU X
Source: Alibaba Group; Gao Feng analysis
Understand consumer’s needs, identify new opportunities,
launch pilot experiments, engage with ecosystem partners, etc.
An entrepreneurial and agile organizational structure
Gao Feng Advisory Company 13
Competitors?
Collaborators?
Rules of business?
China only? Or, China for the world?
China as fringe or as core?
How can you be more Chinese than
the Chinese?
Does it matter? What’s your response?
Source: Gao Feng analysis
Gao Feng Advisory Company
Who is Gao Feng Advisory?
14
THANK
YOU
A pre-eminent strategy and management consulting firm with roots
in China and global vision, capabilities and resources network
We help our clients address and solve their toughest business and
management issues
Our behavior is led by our values
− We put our clients’ interest first and foremost
− We are objective and we view our client engagements as long-term
relationships rather than one-off projects
− We view our people as strategic assets and not merely “units of
capacity”
− We believe that every member of our team can contribute to problem
solving for our clients, from the most senior to the most junior
Our seniors are former senior consultants at leading management
consulting firms and/or senior executives at large corporations
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Us
Gao Feng Advisory Company
Gao Feng’s heritage and our deep roots in
China
15
Our name Gao Feng 高風 is taken
from the Song Dynasty Chinese
proverb Gao Feng Liang Jie 高風亮節
Gao Feng denotes noble character
while Liang Jie refers to a sharp
sense of integrity
We believe this principle lies at the
core of management consulting – a
truly trustworthy partner who will help
clients tackle their toughest issues Follow Us
Gao Feng Advisory Company 16
Contact us
Please find below the contact details for our office locations in
Beijing, Hong Kong and Shanghai or contact us at
Visit our website: www.gaofengadv.com
Gao Feng WeChat
Official Accounts:Gaofengadv
Shanghai:
Gao Feng Advisory Company
Suite 502
119 Ma Dang Road
Huang Pu District
Shanghai 200021, P.R. China
Tel +86 21 6333 9611
Fax +86 21 6326 7808
Beijing:
Gao Feng Advisory Company
Suite 707, Guang Ming Hotel
42 Liangmaqiao Road
Chaoyang District
Beijing 100016, P.R. China
Tel +86 10 8441 8422
Fax +86 10 8441 8423
Hong Kong:
Gao Feng Advisory Company
Suite 923, Level 9
Lee Garden One
33 Hysan Avenue
Causeway Bay, Hong Kong
Tel +852 3959 8856
Fax +852 3959 8800