According to a February Nielsen report on the Chinese consumer market, "health" and "quality" were the keywords for market trends in 2014.
Another driving force in China's consumer retail market is the e-commerce boom that continues to gain momentum.
The evolving demands of Chinese consumers create attractive opportunities for consumer goods companies like Philips, which focuses its attention on developing an understanding of consumer insights to meet their true needs.
"With the backdrop of a rising middle class and increased urbanization, we have found that consumers are increasingly seek innovations that make their lifestyles healthier and more enjoyable," said Fabian Wong, president of Philips Personal Health Greater China, at the launch ceremony of a next-generation rice cooker in Shanghai on February 6.
To better meet the new demands, Philips announced the merger of its Healthcare and Consumer Lifestyle divisions into HealthTech, a new company designed to become an industry leader all along the health continuum. The success of the move will be decided by Philips' success in integrating its market and product expertise with Internet technology to create new value for customers.
Next Phase of HealthTech
During the past five years, Philips Consumer Lifestyle beat competitors on the strengths of highly sought-after products, such as its smart air purifier, which achieved market success after accurate consumer insights were applied from design to release. The strategy has rewarded the division with high double-digit growth for five consecutive years and doubled revenue.
"Our success is based on a deep understanding of local consumers. For instance, we carefully track growing consumer needs in health," said Wong.
Philips backs the claim with heavy investment to develop insights to ensure its products meet real consumer needs.
"Only products based on the perfect combination of consumer insights and innovative technology will receive a warm market welcome," he added.
To ensure the company's growth continues on into the future, Philips recently further defined "Strategy 2017," an innovative plan to track and adapt to China's present and future trends.
The strategy will help Philips capitalize on the convergence of professional health care and consumer markets across the health continuum- from healthy living and prevention, to diagnosis, treatment, recovery and home care.
Digital Platform Enhancement under "Strategic 2017"
"Our "2017 Strategy" is designed to ensure that Philips development keeps pace with China's changing economic conditions under the "new normal" and technical transformations brought on by the Internet of Things, cloud computing and connective technologies," said Wong. Adapting to the changing business environment, following market trends and meeting consumer demands remain central to Philips' business strategy.
Philips Personal Health resulting digital strategy promises customers all-new, smart experiences.
"Our 'Strategy 2017' leverages digital technology to precisely identify and respond to market shifts and seamlessly meet consumer demands at every node of the purchasing cycle," said Wong.
Philips Personal Health is currently focusing its attention on smart product development, e-commerce and e-marketing. Following a new product launch, consumer feedback is monitored on Philips' digital platform and shared across all related departments within just four hours to facilitate an e-marketing response
To deepen its penetration in the digital world, Philips partnered with domestic online giant Alibaba Group. Through a memorandum of understanding signed in 2014, the partnership couples Alibaba's cloud computing and data storage services with Philips' smart products and solutions for customers in China.
"Our aim is to provide Chinese consumers with effective and lower-cost health solutions in this highly connected world," said Wong. "Capitalizing on these growing opportunities will ensure Philips' success in the healthcare industry."
In future, Philips will launch the Philips HealthSuite Digital Platform, which will provide unified digital architecture to support Philips' solutions along the health continuum. Its cloud computing and data storage capabilities will enable Philips to connect health products and solutions with consumers in China.
