Are chinas transport distribution and logistics efficient

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Are chinas transport distribution and logistics efficient

The country leads the world in the number of Internet users, and Chinese enterprises deploy sophisticated e-commerce strategies. The same companies, though, have lagged behind the United States and other developed nations in using the Internet to run key aspects of their businesses Exhibit 1.

Their increased digital engagement will not only give the economy a new burst of momentum but also change the nature of growth. China sorely needs a new leg of expansion because the industrial growth of recent years—driven by heavy capital expenditures in manufacturing—will be difficult to sustain.

The Internet, by contrast, should foster new economic activity rooted in productivity, innovation, and higher consumption. For global companies counting on China for continued growth, the new Internet wave will change the nature of competition: A new McKinsey Global Institute report looks broadly at the coming transformation.

Across six sectors Exhibit 2which accounted for 25 percent of Chinese economic activity inwe find that increased Internet adoption could add 60 billion to 1. About one-third of these gains will come from the creation of entirely new markets, the remainder from productivity gains across the value chain.

When we scale up this level of growth across all sectors of the economy, we find that Internet adoption could add 4 trillion to 14 trillion renminbi to GDP by The Internet is also expected to contribute 7 to 22 percent of total GDP growth from to As the new technologies cascade through markets, less productive business models will cede ground to more innovative ones.

Companies will realize broad productivity gains in operations by automating processes, streamlining product development, and digitally reinforcing their supply chains. Similar improvements will take shape in marketing and distribution as sales organizations deploy the Internet to expand their reach and enrich customer interactions.

Consumers and businesses alike will benefit from lower prices and transaction costs, as well as better goods and services.

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Five implications More specifically, our exploration of how Chinese enterprises are integrating the Internet into their processes suggests five implications for competition and market dynamics: Many are looking to the Internet for a new set of tools to engineer productivity improvements.

Using sensors and communications capabilities—the Internet of Things—the company manages logistics for automakers and other OEMs, helping them optimize inventory levels and transport routes. Our findings, in fact, indicate that supply-chain and operations improvements will be the most potent contributor to Internet-led value gains in autos.

Healthcare providers are implementing remote patient monitoring to stretch their footprints to underserved patient populations while substantially saving costs for patients with chronic disease. Data about a growing number of companies and new analytics tools are giving banks better ways to target risk, thereby lowering the incidence of nonperforming loans and increasing the confidence of lenders.

Are chinas transport distribution and logistics efficient

Digitally mediated transactions, meanwhile, are reducing lending costs—another benefit for smaller business borrowers. A parallel trend is unfolding in consumer lending. Digitization allows banks and other credit suppliers to monitor huge numbers of transactions and to evaluate the risks posed by borrowers more effectively while expanding loans.

Regulators are authorizing pilot programs in online lending by newly formed private players. Technology companies such as Alibaba and Tencent are using access to massive amounts of data to lower lending risks and expand the horizons of consumer credit.

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Securities firms, insurers, and banks are building mobile and online channels to distribute new and more specialized products to a long tail of investors. Online discount brokers, for example, are using Internet platforms to lower commissions on investment products. Online mortgage lending is taking hold as well, expanding the base of home buyers.

A growing base of consumers and richer interactions Social technologies and new digital platforms ease the way for richer interactions with customers and allow companies to meet demand from a more diverse range of buyers, often in new or hard-to-reach markets.

Chemical manufacturers in the agricultural sector are sizing up the potential for big data to help farmers monitor crop conditions in real time, allowing these companies to customize their offerings of products to increase farm yields.Seizing Opportunities in China’s Cold Chain Logistics. Cold chain logistics form the foundation to supply perishable products—fresh fruits and vegetables, meat, dairy, aquaculture products, fresh flowers—and medical products—drugs, reagents, vaccines, biological products—that have strict temperature, humidity, and other environmental requirements.

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The one process ongoing that will take millions of years to correct is the loss of genetic and species diversity by the destruction of natural habitats. Get up-to-the-minute environmentally-friendly (or egregiously unfriendly) car news, reviews, high-quality photos and commentary about living green.

Are chinas transport distribution and logistics efficient

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