The key success factors of Asian companies' digital transformation

Corporate Innovation, East Asia (China, South Korea...), Innovators



March 24, 2020

BATX to conquer all industries

It takes more than an innovation lab to transform a traditional business. It takes a real vision of the future of one’s industry and a deep change of mentality of the teams in charge of innovation. Asia has understood this.

In just a few years, tech giants have changed the global economic landscape. In Europe, these changes were mainly brought by the GAFA (Google, Amazon, Facebook, Apple) and in China by the BATX (Baidu, Alibaba, Tencent and Xiaomi). Chinese players often compete for the market with their American counterparts, which boosts transformation. The e-commerce market is particularly sought after: Alibaba, through various strategic investments in local players such as Paytm in India or Lazada in Southeast Asia, is waging a merciless war with its main competitor Amazon.

Just like in Silicon Valley, these giants have completely changed the way of managing innovation, with a focus on the customer experience and the importance of data, and no longer on profitability. Even more than elsewhere, digital technology has transformed the lives of Asian populations, offering access that was sometimes non-existent to banking services, simplifying payments in countries where the bank card was little or not used, and allowing the emerging middle class to consume abundantly. Their mobile payment solutions are now used by 45% of Chinese citizens. These payment platforms allow them to improve the customer experience and digitize all types of services, from retail to banking, insurance, transport and even the food industry. Alibaba opened its first connected supermarket in January 2016 and now has 100 stores across China.

(BATX to conquer all industries)

ThundeRobot, a business developed by Haier, conquered the gaming laptop market

Associating digital with better living standards, Asian consumers are much more fond of new technologies and less reluctant to share their data in order to benefit from personalized service. As a result, Asian tech giants are accessing more data, allowing them to identify new opportunities to satisfy customers faster, and to become models of inspiration. For traditional companies, these giants are sometimes allies in their transformation process, sometimes threats, but always levers of transformation, pushing them to adapt quickly.

Some visionary leaders of traditional companies in China understood very quickly the need to transform themselves, and  to transform the way they operate internally. Mr. Zhang, leader of Haier, the Chinese home appliance giant, has reorganized his business into small teams, each of them managing their budget and profits, and being paid according to the value created for the consumers. Haier oversees 2,000 micro-businesses operating independently. Employees come up with an idea and can create their own micro-company by training their dedicated team and recruiting from within the company. These micro-enterprises operate like startups: prototype, test, and iterations before launching the product on the market. For example, the gaming laptops brand ThundeRobot was developed by one of Haier’s micro-enterprises and conquered the market to the point of becoming today a public company.

(ThundeRobot, a business developed by Haier, conquered the gaming laptop market)

the Ping An Technology incubator

Initially operating in the insurance sector, Peter Ma, founder of Ping An company, started his business over 30 years ago. He quickly understood the potential of technology in his industry. In 2008, while observing the growth of Alibaba and Tencent, he decided to take a major shift for his company which became a tech company. He replaced all of the group’s IT platforms with cloud platforms, launched the Ping An Technology project incubator and focused its strategy on access to customer data. For example, one of the businesses launched by its incubator, Good Doctor, is an application working by voice recognition that allows you to receive medical advice. It has 265 million users. In early 2019, the company announced the launch of automated clinics in 8 provinces and cities in China, offering online consultations and an automatic drug dispenser. Ping An is now one of the most profitable and innovative insurance groups in the world, generating $ 140 billion in revenue in 2018.

(One of Ping An Good Doctor’s automated clinics launched in January 2019)

First hackathon mixing employees and entrepreneurs organized by DBS in 2015

Singaporean bank DBS has also embarked on a major internal transformation, spurred on by its CEO Piyush Gupta. The challenge was to bring about a profound change in mentalities so that bankers think like startupers. It was one of the first banks to invest its training budget in innovation events such as hackathons mixing startups and employees, trained by agile methods and design thinking. 50 prototypes emerged from these hackathons, 10 of which have become products. DBS is now recognized as one of the most digital banks in Asia. In 2016, it was the first to launch a fully mobile and digital banking service in India with Digibank.

(First hackathon mixing employees and entrepreneurs organized by DBS in 2015)

Innovation Is Everywhere organizes learning expeditions to take companies to discover the digital transformation in Asia

Among the best examples of foreign multinationals that successfully transformed themselves in Asia, Unilever bets on collaboration with startups, by integrating business units as much as possible into the process. These business units share their issues, and the company’s open innovation service, Unilever Foundry, works with them to find outside solutions developed by startups, and to develop Proofs of Concept. This methodology allows to find innovative solutions to the problems faced by the company but is not enough to change mentalities and to adopt a culture of innovation in the company. Hence the idea in early 2017 to open their own coworking space, Level3, on the 3rd floor of their Asian headquarters in Singapore. With numerous tech events organized by this coworking space opened to all employees, Unilever managed to create a stronger bond between the tech world and its business units.

Noticing the undeniable advance of Asia in terms of digital transformation, our consultancy agency, Innovation Is Everywhere, began to organize learning expeditions in Asia for our customers. Over the past four years, we have taken companies like Danone, Vinci Energie, BNP Paribas, Natixis Assurances and Renault to meet key innovation players in China, Singapore, but also Malaysia and South Korea. These learning expeditions, associated with debriefings and workshops, have become major triggers for changing mentalities, allowing to inspire and to bring teams together around a shared vision on the future of their industry, and to prioritize the next actions to accelerate their digital transformation.

(Innovation Is Everywhere organizes learning expeditions to take companies to discover the digital transformation in Asia)