McKinsey Greater China

We’re pleased to share the latest edition of “China Brief”, our quarterly update on Chinese consumption, by Daniel Zipser, Senior Partner and Leader of McKinsey’s Asia Consumer & Retail Practice. Despite underlying challenges such as low consumer sentiment and a property slump, there are still pockets of growth and consumer confidence that offer a more nuanced perspective of the market. In this edition, “The Truth About Chinese Consumption,” Daniel addresses three common myths about Chinese consumption that I’ve been hearing lately from some executives in China: 🔷 Myth 1: Chinese Consumption is Facing a Crisis While consumer sentiment remains low and the anticipated post-pandemic recovery has not fully materialized, China's economy continues to show resilience. Some sectors, such as services and tourism, are experiencing robust growth. Additionally, sectors like sportswear and consumer health have seen double-digit growth, reflecting strong market performance. 🔷 Myth 2: Chinese Consumers Have Lost Their Appetite for Luxury Goods Contrary to this belief, Chinese consumers are increasingly making luxury purchases overseas, with spending levels surpassing those of 2019. This trend is driven by factors such as price differentials and the allure of exclusive items abroad. Consequently, luxury brands are shifting their investments to marketing rather than opening new stores domestically. 🔷 Myth 3: Foreign Companies are Exiting China in Droves While some companies have scaled back, others, particularly in the automotive sector, are increasing their investments. Foreign brands continue to hold significant appeal, especially in the premium and luxury segments. For instance, Chinese-owned foreign sportswear brands have gained substantial market share post-COVID-19. Download the latest China Brief from our website and let us know what you think in the comments! https://lnkd.in/gYRZmgxN #china #consumer #economy

Retail banks are facing profitability pressures due to interest rate differentials and competition from internet financial players. To stay ahead, they must innovate, digitally transform, and expand into new economic fields. In her recent article on Capital 資本平台, Nicole Zhou, Senior Partner and Leader of McKinsey’s Financial Institutions Practice in China, shared her advise for banks embarking on this journey: 🔷 Effectively explore user data: Banks must be customer-centric, leveraging their unique customer data to gain real-time insights and meet customer needs using digital technology. 🔷 Upgrade technical architecture: Banking IT architecture must be flexible and scalable. Using models like APIs can shorten app development time by up to 70%, reduce costs by 20%, and double developer productivity. 🔷 Adopt a more agile operating model: Digitization demands a shift in corporate governance culture. Teams must collaborate effectively, communicating consistently to capitalize on hard-earned advantages. 🔷 Strengthen talent structure: New talents are needed in the digital era. Bank tellers must become versatile, and the ratio of technical development to infrastructure teams will shift. Reskilling internal employees can be 20-30% more cost-effective than hiring anew. 💡 Digital transformation isn't just a trend, it's a necessity. Technology isn't merely a tool, but the key to business success—provided banks have leaders who know how to wield it. The entire industry—its technology, operations, and talent—must transform to meet ever-changing challenges. Read the full article: https://lnkd.in/gbXKx3iP #banks #banking #retail

Last month, HKUST MBA students were warmly welcomed at our Hong Kong office for an exclusive and immersive consulting experience. ⭐ The event's centerpiece was an interactive open-floor Q&A session, where students could pose questions directly to our consultants. Annikka W., Irene KC Huang, Audrey Li, and Jingtong (Maggie) Mai captivated the audience with their personal career journeys, sharing stories of exhilarating projects, complex challenges, and the meaningful impacts they've made for clients. This hour-long session provided unfiltered insights into the dynamic life of a McKinsey consultant, with a spotlight on current consulting market trends and the team's experiences tackling various client challenges. Students were eager to understand the daily lives of our consultants, and the team offered a candid look behind the curtain. They discussed everything from navigating intense project timelines to the importance of adaptability and continuous learning in this ever-evolving field. The open format encouraged a lively exchange, with students gaining firsthand knowledge of what it takes to thrive in this fast-paced environment. Kelly Yeung, our Lead Recruiter and Recruiting Operations Manager for the Greater China Region, also joined the session to offer practical career advice. She provided tips on pursuing a career in consulting and joining McKinsey. Kelly advised students to consider locations where they could leverage their competitive advantages and shared insights on industry challenges, helping them navigate their career paths more effectively. While this was our first office visit for the HKUST MBA cohort, it builds on our annual Pre-MBA networking receptions hosted in Beijing, Shanghai, Taipei, and Hong Kong. After a period of virtual gatherings, we were thrilled to resume in-person events this June, fostering more intimate and engaging connections. This initiative underscores our commitment to nurturing future leaders and providing them with enriching experiences. By offering a glimpse into the world of consulting and equipping students with valuable insights, we hope to inspire the next generation of McKinsey talent. We look forward to continuing these meaningful interactions and helping students unlock their full potential.

Post-pandemic, the tourism industry is set to exceed its 2019 economic contributions, targeting 10.8% of global GDP by 2024. A significant shift towards sustainability is evident: a McKinsey survey last year in cooperation with Trip.com Group and Accor found that 60% of Chinese tourists would explore sustainable development options when traveling. In his recent op-ed on Capital 資本平台, McKinsey’s Partner Jackey Yu shared insights on the industry’s path to sustainable tourism. 🔹 Consumer Behavior Shift: Travelers are increasingly opting for longer stays, sustainable transport, and local cultural engagement, reflecting a deeper environmental consciousness. 🔹 Environmental Challenges: The industry faces hurdles like high carbon emissions, extensive water use, and waste production. For example, a 3-day, 2-night trip can generate substantial environmental impacts, including 330 kilograms of carbon emissions. 🔹 Proactive Industry Measures: Tourism leaders are adopting sustainable practices such as using eco-friendly aviation fuels, creating sustainability ratings for hotels, and launching educational programs for travelers. 🔹 Technological Innovations: The sector is exploring advanced solutions like virtual reality for bookings, green hydrogen for public transport, and sustainable infrastructure in accommodations. 🔹 Government and Regulatory Support: Essential for amplifying sustainability efforts, government actions include reallocating tourism taxes towards eco-friendly projects and supporting industry-wide green initiatives. 🔹 Tourist Participation: Travelers play a critical role by choosing sustainable options, thus driving the demand for greener services and contributing to the industry’s overall sustainability efforts. 🔹 Future Outlook: With combined efforts from all stakeholders, the tourism industry is poised to offer more sustainable and enriching travel experiences, promoting a balance between enjoying global travel and preserving the environment. Read the full article: https://lnkd.in/gpXWdZuU #tourism #sustainability

We’re excited to be part of #Sibos2024 in Beijing. Don't miss this chance to connect with our experts, discover innovative solutions, and engage in thought-provoking conversations. This year, we'll explore delivering on the promise of technology and beyond, from strategy to scale. Stay tuned for more updates and see you in Beijing! Learn more about our presence at Sibos: https://lnkd.in/e4wAaZV5 #McKinsey #Sibos2024 #Finance #Technology #Innovation #GlobalPayments #NeverJustTech

Last week, Karel Eloot, Senior Partner and Leader of McKinsey's Global Metals & Mining Practice, delivered a keynote address on leveraging 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐥𝐞 𝐝𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐭𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐭𝐞𝐞𝐥 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐭𝐨 𝐬𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧 𝐯𝐚𝐥𝐮𝐞, at the 13th China International Steel Congress in Shanghai. The steel industry in China is undergoing significant transformations, reflecting global trends and driven by evolving market demands. The shift from long steel used primarily in construction to flat steel, which is increasingly required for transportation and machinery, marks a pivotal change. This shift necessitates not only higher quality production but also aligns with the broader industrial needs of sectors like automotive, shipbuilding, and home appliances, as well as emerging industries such as wind and solar power. Decarbonization is another critical factor influencing the industry's evolution. It is driving substantial investments in cleaner production methods, enhanced scrap collection and upgrading processes, and greater access to renewable energy sources. These initiatives are essential for reducing the environmental impact of steel production and for aligning with global sustainability goals. "All of this provides great opportunities for local and foreign companies in the broader steel ecosystem to collaborate and to bring innovative solutions to build a more sustainable and stronger steel value chain,” Karel said in an interview with China Daily.   Read the full article by China Daily: https://lnkd.in/gKjTPgCq   #China #steel

In this episode of Made in China Podcast, Daniel Zipser, Senior Partner and Leader of Asia’s Consumer and Retail Practice at McKinsey, explores the dynamic transformations occurring across China.    Daniel has resided in China since 2007. In this dialogue, Daniel imparts his knowledge on the Chinese consumer and the evolving challenges faced by international businesses in China.   He explains why mere presence in the Chinese market is insufficient and strategies for gaining a competitive edge in an environment that is perpetually evolving. Furthermore, the conversation delves into the real desires of Chinese consumers, revealing that their preferences extend beyond high-end products.   Listen to the full episode (in German): Spotify: https://lnkd.in/euQVdhf5 Apple: https://lnkd.in/ecEpNkQd Website: www.madeinchinapodcast.de

Navigating the complexities of modern leadership requires a delicate equilibrium. Leaders must blend humility with confidence, be both assertive and empowering, and act boldly while being cautious of risks. The key to mastering these dualities lies in introspection.   This concept forms the foundation of "The Journey of Leadership," an upcoming book by McKinsey’s Dana Maor, Hans-Werner Kaas, Kurt Strovink, and Ramesh S. Discover more: https://lnkd.in/eVM3C5Hh

In an in-depth interview with the Chinese edition of Harvard Business Review, Joe Ngai, Chairman of McKinsey Greater China, shares insights on navigating the complexities of the global economic landscape and its implications for Chinese companies. Here are some of the key points from the dialogue: 🔹 Global Economic Volatility: Joe discussed the extreme uncertainty prevailing globally, urging leaders to act swiftly. Joe advocates for a proactive approach, emphasizing the importance of listening to diverse perspectives and adapting quickly to changes. 🔹 Chinese Business Leaders' Response: While Chinese entrepreneurs are adept at seizing opportunities, they often lag in making necessary adjustments. Strategic exits and sound decisions are crucial to avoid sustaining unprofitable ventures. 🔹 Challenges for Chinese Companies: With China’s economic conditions undergoing significant shifts, businesses need to recalibrate their expectations and concentrate on their core strengths, pursue innovation, and cultivate distinctiveness to stay competitive. 🔹 Growth Strategies: Joe is an advocate for cultivating an attitude of  humility, pursuing continuous self-reflection, and adapting to evolving business models and changing market conditions. Building a cohesive team and fostering a culture conducive to change are pivotal. 🔹 International Market Challenges: Joe underscores the importance of empathy and understanding in tackling overseas challenges. Business leaders can leverage technology and data to enhance efficiency and competitiveness, while staying attuned to geopolitical shifts and effectively managing diverse teams. 🔹 Proactive Changes Needed: Joe calls for a shift from passively waiting for the market to recover, to embracing slower growth as the new normal. Rethinking business strategies to create value while  remaining prepared for the potential need to e downsize are deemed essential for future success. Dive deeper into these insights (in Chinese): https://lnkd.in/gJXNDKz7 #BusinessStrategy #Leadership #GlobalEconomy

Every day, chief executives must make decisions that involve weighing multiple outcomes and making difficult choices amid constant uncertainty. Our conversations with CEOs reveal that a ‘both/and’ mindset is vital for effectively dealing with these competing demands, much more so than the limiting ‘either/or’ approach. This insight is just one of many gleaned from a survey of 100+ CEOs by the McKinsey Center for CEO Excellence. In a new article, McKinsey’s senior partners Gautam Kumra, Joydeep Sengupta and Mukund Sridhar delved into the common dilemmas that complicate a CEO’s ability to lead in the face of competing priorities. Some interesting ideas from the article: 🔹Vulnerability as Strength: Contrary to popular belief, vulnerability is a potent source of strength for CEOs. Embracing vulnerabilities helps leaders forge deeper connections, build trust, and nurture a thriving organizational culture. 🔹Authenticity and Trust: True leadership is rooted in authenticity. Sharing personal missions and values deepens stakeholder relationships and enhances collaboration and trust across the board. 🔹Finding Balance: A CEO’s role requires balancing core values with innovation, short-term results with long-term growth, and individual empowerment with team cohesion. 🔹Embracing Trade-offs: Recognizing that not all goals can be achieved simultaneously, successful CEOs embrace trade-offs and seek creative solutions to transcend polarities, opening new avenues for growth. 🔹Support Networks and Peer Learning: Leadership can be isolating. Establishing robust support networks and engaging in candid peer dialogues can alleviate this, fostering a sense of community and shared insights. 🔹Regular Reflection and Reassessment: Amidst the relentless demands of running a company, CEOs must carve out time for self-reflection. Regular reassessment of personal priorities and values ensures alignment with the company's mission and maximizes impact. Have a read to discover how leaders effectively navigate these challenges here: https://lnkd.in/eHx4MBRc #leadership #CEO