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Mark Gilbraith joins panel of judges in inaugural China International Business Awards

PwC China’s management consulting leader believes that consumer products companies are staying resilient despite trying times.

Mark Gilbraith, Management Consulting Leader for PwC China Consulting, practice and leads Consumer and Health sectors for consulting. He has also been helping companies improve their performance in applying experience gained across three continents as well as convergent industries to help his clients meet their objectives and achieve rapid growth.

Mark has worked across acquisitive and organic growth strategies of clients with a focus on excellence in execution for over 30 years. He’s been involved with operating model design, post deal integration, business service alignment, sales and inventory operational planning, go to market analysis and implementation, as well as commercial due diligence and market entry feasibility.

Mark commenced his career in business transformation. In an interview with Hong Kong Business, he shares his insights on the consumer goods industry, as well as his advice for businesses planning to expand in China.

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?

My focus has been on consumer facing industries over the last decade. I find this to be the most interesting as the implications of consumer behaviour are complex and fast changing. The analytics that go into pricing, packaging, optimising routes to market whether via the online channels or offline together with the multitude of influencers and aspects of digital marketing keeps consumer markets fascinating and challenging. Even with the more regulated side such as pharma and over-the-counter, the dynamics of the regulatory environment never stop as payors (government and insurers) work toward reducing costs all while catering better to a healthy society that can get the right and best medicines when it needs them. It’s a delicate balance.

Which industries are staying resilient in these trying times? Where should investors put their money to better position themselves in the market?

The categories of consumer products companies doing well include – particularly food and beverage, beauty/cosmetics, nutrition, household products and sports apparel. You can see that each of these has a relation to COVID-19, taking care of ourselves and our environment more. Small business has been hit hard, where they may not have had the cushion to deal with the disruption to business. Yet even across food services: restaurants and bars, there are those that have weathered the storm well and are serving full houses in cities across China regularly. Companies dependent on conducting business in crowded environments, whether airlines, MICE and companies that sell products and services that are non-essential, or of which the purchase can be delayed for a period of time, didn’t fare as well. But that’s not to say there won’t be a rebound of revenge buying behaviour. There has certainly been a permanent step-increase in online buying from consumer demographics that had previously not had an interest – and now it has stuck. There will always be a place for offline retail, it’s a past time and can be an unfiltered inspiration for consumers.

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?

I fear for some small businesses it is too late. They have been hit so hard there may be no rebound. The drive in China over the last several years has been to grow market share and revenue with less regard to cost to serve and almost no regard to risk. Cost and risk are now front and centre as criteria for decision-making. With flexibility and agility taking on new meaning in terms of both cost and risk. Any companies that were only focused on optimisation and growth, had perhaps lost sight of risk as there had been such a long operating run without significant externalities or dynamics in the market.
In the last few months we continue to help our leading clients with digital transformation: identifying where digital resource capabilities should be grown and managed, helping establish state-of -the-art, IoT-enabled major distribution and logistics centres, advising many consumer companies and retailers with a reset of their eCommerce and multi-channel growth strategy and helping them execute against that, detailed precision analytics measuring buyer behaviour triggers, digitisation of functions like procurement and finally analysis of digital marketing and ROI.

For international companies looking to expand in China, is this the best time? How can multinationals stand to benefit from the current situation?

There are plenty of recent examples, particularly in my sectors, of multinational companies expanding in China over the last several months. New plants, new production lines, new distribution centres, new product launches, geographic expansion. So, companies are responding to the strategic growth story-line, responding to increasing consumer demand. Overseas headquarters are looking at China as the country that rebound from the pandemic control quickest and therefore stores could open, shoppers could shop and there is a consumer confidence that is unmatched around the world. For consumer companies, I do believe this is the place to be. Headquarters are realising that a globally balanced business is a stronger business. 

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