IMD2024年中国市场企业创新指数CCTI报告英文版23页_10mb

China Company Transformation Indicator Summary (2024)

The IMD China Company Transformation Indicator (CCTI) evaluates the success and transformation potential of Chinese and multinational companies across three key sectors: Food and Beverage, New Energy Vehicle (NEV), and New Materials. The study identifies core factors that drive competitiveness and long-term growth, including Core Resilience, Business Success, Business Diversity, Customer Engagement, China Policy Power, New Growth Engines, Investment Capacity, Investors’ Expectations of Future Growth, R&D Efforts, and Early Innovation Results, as well as ESG (Environmental, Social, and Governance) performance.

Key Observations Across Sectors

Core Resilience

Core resilience reflects a company’s financial stability and ability to survive in fluctuating markets. In the Food and Beverage sector, Nestlé leads in this aspect. In the NEV sector, BYD and Xpeng demonstrate strong resilience, aided by their alignment with local policies. In the New Materials sector, Samsung Electronics and Honeywell show resilience through R&D and diversified market strategies.

New Growth Engines

This category emphasizes a company’s ability to create new value through innovation, R&D, and sustainable practices. Leading companies in all sectors show strong performance in this area. In the Food and Beverage sector, Coca-Cola leads due to its early innovation initiatives. In the NEV sector, Tesla and BYD are the top performers in innovation. In the New Materials sector, Samsung, Honeywell, and Renesas excel. However, ESG remains a weak area for many Chinese companies.

Business Success

Business success is measured by profitability and financial stability. Coca-Cola is the top performer in the Food and Beverage sector, followed by Wuliangye Yibin, Kweichow Moutai, and PepsiCo. In the NEV sector, BYD leads, while NIO and Li Auto are top-ranked. In the New Materials sector, Semcorp and Easpring Material perform strongly in this measure.

China Policy Power

Influencing Chinese policy is a critical factor for navigating the domestic market. Coca-Cola leads in this aspect in the Food and Beverage sector, while BYD and Xpeng excel in the NEV sector. Samsung Electronics leads in the New Materials sector. However, this influence comes with risks, as demonstrated by the imposition of tariffs in Europe and the U.S. on Chinese products.

Business Diversity

Business diversity involves a wide range of product offerings and international presence. Nestlé leads in this category in the Food and Beverage sector, while BYD and NIO also perform well. In the New Materials sector, Samsung and Honeywell demonstrate strong diversification strategies. This factor is particularly beneficial for international companies allowing them to adapt to diverse market needs.

Customer Engagement

The ability to meet consumer needs through digital platforms such as social media and e-commerce is a vital component across sectors. BYHEALTH made significant progress in the Food and Beverage sector, and NIO is noted for its engagement initiatives. Companies that excel in this area are better positioned to support growth through consumer interaction and insights.

ESG

While ESG is becoming increasingly central, foreign multinational companies (MNCs) in the Food and Beverage and New Materials sectors generally outperform local firms in this category. This reflects the global standards and sustainability practices adopted by international companies, demonstrating their advantage in environmental and social initiatives.

Sector-Specific Insights

Food and Beverage Sector

• Overall, the sector is witnessing a shift towards healthier and more innovative products. Coca-Cola leads due to its strong Early Innovation performance and deep understanding of local preferences.
• There is fierce competition in the market, with Wuliangye, Kweichow Moutai, Mengniu, and Yili consistently performing well.
• BYHEALTH significantly improved its ranking, highlighting the importance of customer engagement and digital platforms.
• Chinese companies like China Feihe have faced challenges, such as declining birth rates, and must focus on Business Diversity and exploring new growth areas.

New Energy Vehicle (NEV) Sector

• The NEV market is growing rapidly due to technological advancements, policy support, and changing consumer behavior.
• Local brands such as BYD, Geely, Xpeng, LiAuto, and NIO dominate. Tesla remains the only foreign player in the top five.
• A clear trend is the rising market share of Chinese NEVs, which has increased from 41.2% in 2021 to 56.1% in the first five months of 2024.
• BYD stands out due to its vertical integration, advanced technologies, and strategic exports.
• Tesla scores high in innovation but faces limitations in local market engagement.

New Materials Sector

• The New Materials sector is pivotal for scientific and technological advancement but is currently dominated by foreign MNCs.
• In the top 10 of the 2024 CCTI, Semcorp and Easpring Material are notable Chinese businesses, showing market growth and strategic partnerships.
• Samsung, Honeywell, and Renesas exhibit strong performance through long-term strategies, sustainability, and strategic acquisitions.
• Chinese companies are catching up in the New Materials sector with a focus on R&D, Business Diversity, and market-driven practices.

Methodology and Data Analysis

• The CCTI uses a rule-based methodology adapted from the Future Readiness Indicator. It is localized to China with customized metrics for each sector.
• Data sources include company reports, press releases, financial data, academic journals, and government publications.
• Advanced data science tools such as text mining, factor analysis, and random forests are used to ensure robust and reliable results.
• The ranking is calculated using weighted standardized factors, capturing both current performance and future potential across sectors.

Summary

The 2024 CCTI provides valuable insights for companies aiming to thrive in China. It highlights the importance of innovation, adaptability, and strategic alignment with both market trends and government policies. While foreign MNCs perform well in areas such as ESG, local companies are improving in Business Diversity, China Policy Power, and Customer Engagement. The study underscores the transformative potential of leading players across sectors, urging companies to invest in R&D and early innovation to secure long-term success in the complex and evolving Chinese market.