Chinese companies focus digital efforts on products and services
Digital and its transformation have created positive impacts on the future of companies. Meanwhile, Chinese respondents are aware that technology is both an enabler and a threat.
Unlike global respondents, Chinese respondents are more passionate about delivering innovative products and services, and their digital capabilities are more likely to be centralized under a Chief Digital Officer or a Chief Technology Officer (67%). Yet, while China excels in creating a customer-oriented digital environment, it lags behind leading economies in business-oriented digital environment, such as manufacturing and supply chain.
Bolt-on acquisitions favored as M&A appetite remains robust
Although Chinese companies face challenges when making overseas investment, 46% of Chinese executives expect to actively pursue M&A deals in the next 12 months. Despite geopolitical fears or the shadow of an economic slowdown, companies are actively looking to M&A to navigate current and potential barriers to growth.
As companies evaluate a variety of deals to reinvent business models in response to the changing technological and competitive landscape, 48% of Chinese respondents expect an increase in their M&A pipeline, while 59% of Chinese respondents expect to close more deals over the next 12 months.
Most companies favor bolt-on acquisitions (66%) to complement existing business and transitional capabilities acquisitions (23%) that change the way companies operate, digitize and expand new ways to serve customers. In terms of industry, life science (85%), media and entertainment (75%) and technology (54%) rank the top three among M&A activities to be pursued over the next 12 months.