The lead partner notes that COVID-19 has impacted every sector to varying degrees but some stayed resilient.
Jens Ewert, MNC Affairs Lead Partner in Deloitte China, covers the professional services firm’s multi-disciplinary services storefront for its global crown jewels accounts in China. He is based in Shanghai, and a core member of Deloitte’s Markets & Network team and CxO Program.
Jens also holds a Lead Client Service Partner role for a number of MNCs across multiple industries in China and covers this role for French headquartered companies across Deloitte’s Asia Pacific Region.
Chosen as one of the judges at the China International Business Awards, Hong Kong Business talked to Jens as he discussed the resilience of the sectors amidst the pandemic, and how companies can quickly adapt to the "next normal".
Which particular markets or sectors are your main focus? Can you share with us your work experience or any backstory that has contributed to your professional career?
During my career, I have had the opportunity to work with clients in nearly every industry. I started my post-high school education learning about the financial services industry and working in a financial institution during my second year—experiencing all of its functions and services. This gave me a very practical perspective on how complex organizations arrange work tasks and assign different levels of people to execute these on a day-to-day basis. I remember that at this time there were no PCs, let alone laptops and mobile applications, and photocopy machines did not yet exist—everything was manual. Later, when I joined the professional services sector and worked my way up, gaining more responsibility, my objective was always to aim high and go that 'extra mile', which are principles that continue to hold me in good stead in my career today.
These days, I spend a significant amount of time focusing on the life sciences and healthcare industry in China. As Deloitte China's Life Science & Health Care Industry Leader, I head a team of more than 600 partner & professionals focused on working with life sciences and pharma companies, healthcare and related services groups, on a full range of engagements, from consulting, to audit and tax, to financial advisory and enterprise risk services.
Which industries are resilient in these trying times? Where should investors put their money to better position themselves in the market?
A sector's resilience is closely linked to whether it meets people's essential needs. COVID-19 has impacted every sector to varying degrees, but essential industries such as energy, food and medical services have been more resilient.
Energy is always required, although demand volume changes. Despite short-term volatility, Deloitte's recent research suggests energy and industrials will likely continue to prioritize moving to cleaner energy sources in the long term as they position for a lower-carbon future. New 5G, cloud computing and IoT infrastructure initiatives will also boost the energy industry, which is the nexus for building and powering the smart, connected world of tomorrow.
Food is also an essential need, with supermarkets, online grocery as well as food delivery services seeing a surge in demand. Although lockdown mandates have hampered F&B and physical retail, restaurants and consumer brands are shifting online and accelerating their digital transformations to cater to customers' changing buying habits and increasing preference for omnichannel experiences.
The outbreak has also shone a spotlight on healthcare and medicine providers. Deloitte's analysis suggests the pandemic will likely lead to profound changes to the dynamics of China's healthcare industry. These could include massive investment in disease prevention infrastructure, the accelerated digital transformation of healthcare delivery models, re-visiting pharmaceutical companies pipeline strategies, and the adoption of advanced technology healthcare solutions. In addition, we have seen during COVID-19 the benefits of a strong diagnostics industry in Guangdong, highlighting the potential for the medical sector in the Greater Bay Area.
What can businesses learn from the crisis? For those who have been badly hit, what do they need to consider to become more profitable and sustainable in the future?
Various industries have different patterns and cycles, but the key takeaway is that any business needs to stay agile, and be ready and able to respond to dynamic situations. To do this, it needs to build a strategic framework for real-time monitoring, assessment and management of any risks along its value chain. The pandemic has clearly added a sense of urgency for businesses to accelerate their digital transformations to achieve business continuity and growth.
Aviation and travel are among the industries hit hardest by the pandemic. Although it remains unclear how long COVID-19's effects will last, airlines and travel companies can quickly adapt to the "next normal" by recalibrating investment, addressing new consumer expectations and transforming their supply chains to thrive in a new market landscape.
For international companies looking to expand in China, is this the best time? How can multinationals stand to benefit from the current situation?
Despite short-term uncertainties, China remains a market too big to ignore for international companies. With COVID-19 under control, businesses in China have accelerated the resumption of work and commercial activities. The country's economy was also the first to bounce back from the impact of this global crisis, putting businesses operating in China in a better position for recovery and growth. Furthermore, the continuous improvement of China's business environment, including the newly enacted Foreign Investment Law, which relaxes restrictions on foreign entities, will enable multinationals to develop and expand in China. While the inbound travel restrictions remain and decrease foreign tourists to China and hinder new foreign investment projects—reduced outbound travel has actually increased domestic demand for a number of products and services that were usually purchased by Chinese consumers when being overseas.
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