Leading Asia CEOs offer insights into post-pandemic business world

Accelerated digitalization and greater emphasis on corporate character — those were the two key takeaways as some of Asia’s leading business figures, including Rakuten CEO Mickey Mikitani, sat down with Fortune magazine earlier this month to discuss long-term trends likely to emerge from the COVID-19 pandemic.

Joining Mikitani in the online forum hosted by Fortune Media CEO Alan Murray were Yum China CEO Joey Wat, Grab CEO and co-founder Anthony Tan and Alibaba CEO Daniel Zhang.

Accelerating digital transformation

The meeting started with Fortune’s Murray asking Rakuten’s Mikitani about returning to the office and what he’s learned since the outbreak of COVID-19. Mikitani said that the working environment could very well be changed for the long term, including a broader recognition of remote work. But he focused on digitalization, suggesting that this had accelerated rapidly in Japan even in the months prior to the onset of the pandemic.

“Japan was a bit behind in terms of digital transformation for education and working. But the good thing is we have been preparing for the Olympics. We knew Tokyo would be extremely congested and so we created a virtual working space and prepared enough PCs for our employees. Most of Tokyo’s big-sized companies, with a few exceptions, were prepared for this digital working style.”

The digitalization trend has also spread to medicine. Mikitani highlighted the Japanese government’s pandemic-influenced decision to allow initial medical consultations with doctors to occur online — something that would have been almost unthinkable in Japan even a year ago. “Digitalization is proceeding and now hopefully the government is serious enough to do this,” he said.

The depth of these changes is evident in mobile phone data usage trends, Mikitani continued. Launched in April, Rakuten’s own fully virtualized cloud-native mobile network, Rakuten Mobile, is seeing rates of data consumption that are double that of legacy mobile network companies. “We can see big behavior changes from consumers,” he said.

Likewise, Rakuten’s domestic e-commerce was up more than 50% this April, he commented, as consumers stayed home and did their shopping online.

Apps for all?

Mikitani’s comments were echoed by the other speakers. Alibaba CEO Daniel Zhang pointed out that with the pandemic, consumers in China had “expanded their online shopping habits from fashion and consumer electronics to necessities including food and groceries.”

Joey Wat, CEO of Yum China, who runs Pizza Hut and KFC franchises in China, noted that she is now seeing a trend where “all these mom and pop shops, even hair salons, want to do digitalization, want an app, so they can continue to do business.”

Anthony Tan, CEO and cofounder of Singapore-based ride-hailing service Grab, commented that digitalization is accelerating in South East Asia, but that the region was still probably a decade behind China. “Only 15 percent (of SMEs) have any form of online presence,” he said. “So 85 percent don’t even use the internet to help their business. And COVID-19 basically accelerated everything. We saw a chance to bring them on this journey together and help them grow their business.”

Companies will step up to take on societal challenges

The second focus of the Fortune discussion was on corporate character and how the stress imposed by the pandemic on society at large was pushing corporations to take a more proactive role in supporting key functions in society.

Grab’s Tan explained that in Southeast Asia, “Governments are looking at corporates like us more than ever to really be fellow co-nation builders.” He noted the example of how many drivers had been scared to take doctors to hospitals. “We provided a dedicated fleet of cars that we can [use to] bring frontline workers to hospitals.”

Yum China’s Wat agreed, adding that as the pandemic made consumers more cautious in their behavior, they gravitated towards companies that have demonstrated strong adherence to values like hygiene. “From the consumer point of view, companies with a good track record in consumer safety will be seen more positively,” she said.

Asia offers post-pandemic reference points

Bringing the event to a close, Fortune’s Murray was keen to point out that the changes discussed in regard to Asia are likely to be seen in other countries soon. “Asia felt the force of the virus first and so they are well ahead of those of us in the U.S. or Europe in terms of understanding its long-term impact,” he noted.

With Asia’s head start in facing the pandemic and, in many cases, strong results in mitigating its spread, the actions taken in this region may become valuable reference points for the rest of the world.