Jenny Chan 陳詠欣
Oct 30, 2015

Chinese brands' digital spending too focused on sales: PwC

CHINA - PwC’s 7th Digital IQ survey has highlighted how the digital budgets of Chinese brands focus too narrowly on sales and marketing, compared with global peers who spread digital spending more evenly over customer service, operations and enterprise functions (such as human resources, finance, risk and compliance).

Chinese brands' digital spending too focused on sales: PwC

This is a consequence of their digital investments remaining more tactical than strategic in nature, said Scott Likens, data and analytics leader at PricewaterhouseCoopers Hong Kong and China.

The original intent of the annual PwC survey was to explore the ability of organisations to use technology in driving business value. In China, 55 percent of C-suite respondents spend more than one-tenth of revenue on digital investments.

Within that budget, 43 percent is allocated to sales and marketing while 34 percent is focused on IT (see chart below).

Seven years ago when the survey was started, digital was "a disrupter", noted Likens. Now, it's about growth—so digital investments into sales and marketing are direct executions for growth.

PwC's hypothesis provides a further explanation: the "easy wins" in e-commerce have excited Chinese leaders too much to think about investing more proportionately in other areas. It is not surprising as sales and marketing fulfil the business goals of selling to more customers.

Also, the survey identified that technology architecture and design is considered to be the most important digital skill for business success (76 percent vs 40 percent globally) in the mainland.

Conversely, more global respondents prized data-analytics skills than their Chinese peers (40 percent vs 25 percent). This indicates a notable difference in how digital skills are prioritised in China.

"This links back to the success companies in China has seen in e-commerce, but now it's time to think about sustainability of that," pointed out Likens.

To improve their competitiveness, Chinese companies should look at balancing digital investments and span them across the enterprise, beyond the traditional sales and IT focuses, he advised.

This will create more agile processes that enable them to pivot towards a culture of technology and customer innovation,” added Adam Xu, PwC China's strategy and digital consulting lead partner.

 

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