The China Mobile trick and benefits from CSR in the Healthcare market in China

China Mobile, the largest telecom provider in the world

China Mobile was working a few years ago on their Corporate Social Responsibility and business strategy, and one of the main new ideas they had, was to bring their mobile technology to the people of China in the most remote areas of this Country: a huge investment, as less people live in the remote rural areas. Unlike the second and third tier cities here, where even a small city means two million people living and working and paying for a mobile phone connection..

CSR and Business Strategy aligned for the rural areas of China

China Mobile did what they said they wanted to do, invested into the countryside and gained an extra 100 million customers: apparently, the people in remote areas are very happy to be able to communicate through mobile technology, something we see everywhere in the developing world: poor people in remote areas invest relatively a lot to have a mobile phone, as it makes contact with others , and makes trade and growing a business possible.

Rural areas need a different market approach, a responsible one.

China Mobile’s CSR (and you may say plain good business) strategy paid off: attending to the needs of the poor masses worked well (100 mill customers extra). Now I want to turn to another business sector in China, which is booming at the moment, and has a similar business case, the Healthcare sector. The past years two interesting reports came out: one on emerging markets (KMPG) and healthcare, one specifically on the Healthcare market opportunities in China (Dutch Ministry of Healthcare).  They both had the same message: don’t just stare blindly at the high end Healthcare market to gain access and make a profit, but emerging countries need good quality, simple to use, mass products for the common diseases and illnesses. And very important, reliable and easy after sales services are crucial for use of these products.

One reason extra why CSR matters in the Healthcare market.

That last notion, great after sales services may seem trivial, but a Western multinational  (we shall not speak its name) tried to sell expensive scanning equipment in Eastern Europe, and intentionally made the machine too difficult to handle so they could  make huge profit on the after sales service. They got caught doing it, and suffered a great financial blow in that Country. But a company that wants to work in the Healthcare sector, should have not just the legal matters and business strategy right: putting your CSR in the business strategy, can lead the way to see the right opportunity for a mass market for your product: Having a good quality simple product that is easy to handle (for not all medical personnel is well trained) and easy to repair, is a socially responsible product: with it you serve the masses in a Country that otherwise would not have access to good Healthcare, with is a basic human right. The Chinese Government acknowledges this, and is focusing on improving the Healthcare situation in remote areas. Business opportunities are there, but a company with a good CSR approach embedded in their business plan, will have a better chance of succeeding than a company without… For best practices, see the two reports below for more evidence.

‘Necessity: the Mother of innovation’ report from KPMG Netherlands, http://www.kpmg.com/global/en/issuesandinsights/articlespublications/necessity-mother-of-innovation/pages/default.aspx and the ‘Kansenrapport Life Sciences and Health’ (the report itself is completely English) http://china.nlambassade.org/Zakendoen_in/kansen-en-sectoren/life-sciences.html

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