How Reckitt's China Business Became One of the World's Largest

How Reckitt's China Business Rose from Fringe to One of the World's Largest Businesses

Preface

On January 25, 2022, Gao Feng Advisory's CEO Dr. Edward Tse had a dialogue with Aditya Seghal, who recently retired as President from Reckitt – a FTSE 20 company, a global leader in Health, Hygiene and Nutrition. He also built eRB – Reckitt’s e-commerce arm, and formerly led Reckitt’s business in China and North Asia for seven years. In this dialogue, they discussed how multinational companies can be successful in China.

Edward Tse (hereinafter Ed): Hello everyone. My name is Edward Tse. I am with Gao Feng Advisory company. We are a strategy and management consulting firm with roots in China. I'm very happy today, in fact extremely delighted, to have one of my old clients and a great friend, Aditya Sehgal, to be with us today.

I've known Adi for well over 12 years. We got to know each other when Adi and his company hired us to do some work at that time, but we stayed in touch all along. We have kept in close contact and have a lot of conversations on how global multinational companies, which we usually call MNCs, can be successful in China.

So today, I would like to have a dialogue with Adi to seek his wisdom on how global companies can be successful in China, and what are his general reflections about doing business in general because Adi is a very well-established business person. Let me introduce him briefly before we go into the questions.

Aditya Sehgal is a retired president from Reckitt, a FTSE 20 company and a global leader in nutrition, hygiene and health. He had been with Reckitt for 27 years before he retired and I believe his last job was the leader of the global nutrition and health business. Also very importantly, he spent 7 years leading Reckitt’s business in China and North Asia with the aim to transform the business there.

So today, I am very glad to have Adi, and thank you Adi for joining us.

Aditya Sehgal (hereinafter Adi): Thank you very much Dr. Tse for having me and also thank you very much for your contribution to those 7 years and to the things that we are about to discuss.

Ed: Fantastic. As I mentioned, I have known you since well over 12 years ago. As you also know, I work with a large number of global multinational companies (MNCs) in China and also outside of China. I’d say you come to me as a very unique person, because you are very smart in running a successful MNC business, and I also find you to have a lot of wisdom when it comes to knowing and talking about issues related to China and how China relates to the rest of the world.

Your company was a global company. I still remember when we started working together, your CEO at that time was Rakesh Kapoor, who was also a mutual good friend of ours, he told me that at that time, Reckitt's business in China was ranked something like the 25th biggest market globally. I also remember, perhaps one or a couple of years before you retired from Reckitt, Rakesh was so glad to tell me that China's business for Reckitt has gone up to number two in the world. I think right behind Europe, wasn’t it?

Adi: It was right behind the US actually.

Ed: That was an incredible development within a decade's time that a market like China has gone up so rapidly in its importance to a major global company. I also remember you and Rakesh at that time actually talked about the vision of creating China, as well as India, to be very important markets for Reckitt on a global basis. And you made it! You created that from a vision to reality and that's really incredible. Perhaps you can tell us a little bit about the whole story of how you and Rakesh thought about this, committed to it, and made it happen.

Adi: Yes. So actually, for many years the company Reckitt Benckiser (RB) had struggled to grow in China, and what we were trying to do for many years was to actually take a global operating model and apply that in China, and also pick up the same framework of operation then apply it in China. That was not working because we actually found we were in categories which were about household cleaning. We were trying to charge for very premium products and make high margins and then somehow put that money back into advertising and growing in the market.

This was quite difficult in China, because, just for the simple reason that it is very difficult to compete with the Chinese companies on costs for things like cleaning products and expect to really win that kind of battle. At the same time, the Chinese ecosystem was different, so it had different opportunities and different threats. It was only when we really went through many years of challenges and difficulty, and we thought that there was nothing else left to lose that we really thought of a different way of how to address China. The first point we said was that China is so important, and yet so small for us. There is no choice - we cannot claim to be a global MNC unless we are big in China. There are massive opportunities in China, so the growth opportunity for us in China itself was significant enough to have a material impact on the global group. So very early on in the process, even when we were less than half of a percent of global revenue, the Chinese management team got together and said we are going to sound completely crazy, but we are going to put a crazy vision out. They were saying that by 2020, we expect to deliver 20% of the global growth of the company. This was completely unheard of at that point of time, but we actually made that commitment.What we also did was that we knew that we could not do this without help. So, Rakesh and I, we asked the global leadership team to come to China to immerse themselves and to spend time educating themselves about China. You also would remember this because you spoke with that team at that time.

Source: Google

When the team came to China, they saw the opportunity and the growth. We had discussions on two things. First, because China was so important, we needed a different strategy, a bespoke strategy. Normally, this was not something that was easy to be agreed with. For a company, that could be quite centrally driven from a strategic point, we agreed that our China strategy would be growing on health and hygiene rather than home-care. That was a big deal because that immediately got us into high-gross-margin categories and that got us into categories where Chinese consumers were prepared to premiums. As we learned later, Chinese people like to pay premiums in categories which give them health or faith, not just utilitarian categories. This was one useful and important learning that we had.

The second thing we said was that rather than trying to impose an external framework in China which doesn't work. We should grow with China and we should actually use the best of China to influence us.

Way back in around 2010, we started working on e-commerce and social media even before WeChat was launched. With Weibo itself, we shifted all our events there. At that point of time, we started by making small impacts, but over a period of time these small impacts in both revenues as well as in models, progressed to the extent that today's business is probably almost close to a billion dollars, which has a significant proportion, about 70% driven by e-commerce. But not just that, the learnings that we got from that e-commerce growth and the journey that we had actually then informed us how we set up e-commerce in the rest of the world and had a very material importance for the company subsequently.

I would say the third thing we did differently in China is that we opened ourselves to a more Chinese way of growing, which is rather how we can find people to partner with and actually build lasting partnerships with, which actually deliver value and growth and eventually make both partners almost like family. You may have issues sometimes, but it doesn’t matter. At least you can talk about them and address them. As long as you have a common view of a shared future, you can work through partnerships.

China taught us partnerships. China taught us how to look at the world of high technology, how to think big in the long term, but also do it in a way where we're not overestimating China in the short term and not underestimating China in the long term. When you put all of these learnings together along with the fantastic teams and the quality of people that we always had in China, this resulted over a period of time in explosive growth where China became our No.1 growth driver at the company for many years.

Ed: That is a fantastic story. I remember all the elements that you talked about. We can go through each of these elements in a little bit more detail. I remember the vision you and Rakesh built. At that time, it was almost impossible, but you made it. You made it because you had vision, courage, and the understanding to take on a very different approach that you have not been doing in markets in other parts of the world.

That was a very good and important part of why you were successful. You mentioned e-commerce. I also remember that very vividly. I think you were probably one of the earliest pioneers, at least within the MNCs, in really taking on e-commerce or digital as a way to go to the market in China. In fact, at that time, I remember quite a number of my other clients have heard about your successful story and asked us to help benchmark what Reckitt has been doing in China. Perhaps you can talk a little bit about that because I know that you set up eRB, which is the global e-commerce platform for RB as a whole. If you don't mind, if you can talk a little bit about it, because a lot of people know about that notion by now. But seven or eight years ago, it was not really that well known, in particular in the western world. How did you come up with that, and what did you do to really get it started and get your own traction?

Adi: That is a great question. One of the things I always say about China and one of the reasons I always want to be connected with China is that China gives people in the West like me, the ability to see the future. Certainly, in the world of e-commerce and tech, along with the US, China is the one place where if you see what is happening in the world of e-commerce, data, AI today, this is what is going to happen in the rest of the world a few years from now. You can see a particular future coming at you like a train, you can prepare for it much better. You can also see how those problems were addressed in China, how this problem was solved in China, and then you can take the same solutions to global and those solutions work in my experience.

Let me explain what I mean.

The first thing we learned in China about e-commerce is that e-commerce is a multi-channel business. It is not a monolithic business, and each channel incrementally creates your business. Each of these channels requires a completely different strategy. When we were in China, we found that there were three kinds of e-commerce businesses for us as a company. The first was an e-commerce business that we knew how to do it. This is like setting up Alibaba marketplace vendors or setting up your online store on Alibaba. The primary objective of us as the company, becomes to try and scale that. Normally, the best way to scale things, where we know how to do something, is to go back to the old assembly line idea of the Model T of Henry Ford. Basically, you try and divisionalize labor. You make people repeat the same thing multiple times and you can put a lot of money, scale and energy into creating an organization or a machine, and each part of the machine has a very well-defined purpose and repeats that with greater and greater efficiency. Hence, the parts of e-commerce that you know how to do, you will go after them, resource them, and expect high revenues certainly on your objective scale.

Then there is a second kind of e-commerce business, which are all these new business models that keep getting generated. For example, how do you do e-commerce with TikTok, how do you do e-commerce for gaming, what is the role of NFTs in e-commerce, how do you do cross-border e-commerce if there is a Chinese restriction in the US, how can you leverage them to drive sales in China. You do not know how to do these things. What you do here is rather than putting a lot of money at the problem or aiming at scale, you actually create an organization which is very nimble, almost like a startup within your company. You are focusing on giving autonomy to the startup so that they can make good decisions that they need, without any friction.

The reason you do not want friction is because you want the flywheel. The flywheel is trying to learn change. I want the flywheel to turn very fast. Every time the flywheel turns you have one learning. In normal organizations like large MNCs, you will have one learning a quarter, but in this case, you need to have one learning every 15 minutes. The more learnings you have, the faster the flywheel turns, then the faster that business grows to a point where you know how to run the business, at which point you can transfer it to the first kind of model, which is what I call the big model. So, this is the big model and the be-fast model.

And there is a third model which is a super important model. This is what I call the be-broad model and we also learned this in China. What you do here is to re-imagine your company as a platform. Your company has a significant number of capabilities, services, and regulatory reach. How can you connect with other people in the ecosystem and welcome them on your platform and form a win-win partnership? Win-win does not mean I win first. Win-win in China means you win first. If you can set up this kind of partnerships, you will find a lot of people who have what I call the Chinese dream. The Chinese dream is very similar to what the American dream used to be a couple of hundred years ago. Chinese people have realized that it's as Mr. Deng Xiaoping said, to be rich is glorious. You have all of these highly driven, highly capable people, whom your platform is enabling to be rich. As they become rich, you tie yourself to them structurally so that you also get dragged along with them and you get learnings in that ecosystem. Therefore, you have an ecosystem play which eventually becomes something like an incubator, an accelerator, an investment platform for other companies, partnerships and relationships.

These are three different kinds of archetypes and different kinds of teams need to run this. When we built eRB globally, we actually took these three archetypes and we established them across the world. We actually built organizations that worked on each of these three verticals with different business models along with two other principles.

In China, e-commerce went everywhere. Across the world we had a principle that said whether you are in Chile, the US, Indonesia, I still expect e-commerce to be your number one driver of growth. No country is an exception. It is not sequential. It is parallel.

And second, no category of brand is an exception. Just because you are sitting on a category that is about hand wash for example, rather than a category that is baby formula, it is no excuse to say that your e-commerce contribution is low. It is just that you have not found the right business model yet, so change your business model.

So those are all the learnings that came out of China, along with the highly executional learnings of how to do e-commerce, how to set up, how to optimize, how to do a TikTok store. All those also came out of China. For us, I think there is a huge debt of gratitude to our Chinese teams and Chinese partners on how this was created and how these learnings then later subsequently impacted the whole world for the company.

Ed: That is a really fantastic story because you started with a vision that digital or e-commerce was coming. Perhaps not many other people outside of China realized that, certainly not within RB at that time and perhaps not in other global companies either. But you took the vision and you turned it into practice. It looks like you also very quickly came to realization that there were three types of business models, three archetypes. That vision was really helpful in my view because it really applies to different parts of the world as you try to roll this out.

Source: Google

Not everybody has to follow one archetype. Every market may be different, but the notion that you need to move in that direction was already pretty clear in your mind very early days. A lot of people knew about it seven or eight years later, but seven or eight years earlier you had the vision, and that was really amazing.

Adi: Yes, it has been such a fulfilling journey, but in hindsight, the journey was made relatively easy because we went on "a journey". It was almost like a scout mission in China, which actually taught us what to do, and then the main army could follow later. That resulted in China to delivering growth twice. The first time it delivered growth, it was direct growth coming from China which we actually did achieve the goal of 20%-growth-by-2020 actually by 2019.

The second element of growth that came from China was the massive explosion of e-commerce growth that followed that also came partially because of the competitive advantage we gained globally by using all these different archetypes. We were running on three cylinders or two cylinders while many other companies were only working with one cylinder which is just working with amazon or just doing a part of the e-commerce ecosystem.

Ed: When you talked about the archetypes and e-commerce, within the e-commerce context, you mentioned about the model to work with the partners. I know that working with partners as a philosophy in China for Reckitt was not just only about e-commerce. It was a general business philosophy for you. I believe that you were a key driver behind doing this. I still remember when we worked together you said this is not how we work from the mother company. But in China, this is how we should work. From that, you actually synthesize a number of learnings from working with the partners, with the Chinese teams and so on. Perhaps you can also articulate that from your standpoint.

Adi: Actually interestingly, at one point as a management team, we also went away and spent some time on the Great Wall, and had some nice pictures and memories from that.

Ed: I was there.

Adi: Yeah, of course. When we worked on our philosophy in China, one of the interesting things was that which there was nine or ten things in the philosophy of China, one of the parts of philosophy was that we created a Venn diagram. The Venn diagram said this is how we work globally, this is how we work in China, and we want to be the intersection. If there is a conflict, then we will prefer the one that works in China.

We found a way to bring global culture, and in the rare occasions when there was a conflict, we optimized for the book. In this case, we were so lucky that we found Chinese partners that we worked with who are so capable, so principled, so structured, so focused on growing the business, so selfless in a sense that it really taught us as a global multinational company, what partnership could be and what partnership should be. Interestingly, we used to have four global values - achievement, commitment, entrepreneurship and teamwork. After spending some time in China with the leadership team, over a period of time, the fourth value changed from teamwork to partnership. That really was the gift that came from, in my opinion, our Chinese partner, who is very much led by a remarkable person who is himself almost like a sage, who is really young, dynamic, focused on the business and focused on the key principles. As long as the principles are right, everything else follows. Let us focus on making the principles, and then of course execution will happen.

One of the biggest lessons that this partner gave me was that we were once having a conversation about partnership and he asked me what partnership is to you. I said partnership is a win-win. He said it is not possible to have a win-win, because you cannot be in a situation where you win and everyone wins, and everyone keeps winning all the time. It does not work like that. So, I said what is your definition of partnership? He said my definition of partnership is you win first. I let you win first. Once you have won, you pull me up, so I can win as well. If both partners are working on the belief that you win first and bring that element of selflessness and that demonstrated care for growing the partners business in a principle-centered leadership way. In a way that makes me understand legal contracts in China. One of the things about Chinese culture that I learned, in the West, we spend a lot of time doing legal contracts and when the legal contract and the negotiation is done, the person from the West is saying oh now that is done, now we are going to start working together. But the Chinese person is thinking OK, I have signed this worthless piece of paper with you, I spent enough time with you now to know that I trust you. Now that I trust you, let us have the real discussion on the table.

The moment that you know that your partner is very principled, it is just that perhaps the partner sometimes plays with different rules, so you’d better go and understand what those rules are. It can create a very long and very harmonious relationship and in this case that has actually been the case. So, I would say about our success in China, I would entirely attribute it to our fantastic people and the teams in China and those fantastic partnerships that we had in China.

Ed: I remember talking to your local partner about this as well and he used the Chinese term called ‘利他主义’, so I guess in English roughly we can say this is providing benefits to others first. Would you agree with that? Is that how you interpret it?

Adi: Absolutely right. And the beautiful thing about a partnership is if both partners are trying to do that, it is so visible, right?

Ed: Right, it is also enjoyable, isn't it?

Adi: It is enjoyable. I remember for every other country, when you do a business review, like do a meeting, you do that in a very formal setting. What we realized was the best way to work with our partners in China was rather than spending time in meeting rooms, you actually go with the GM of the partner. Go to a particular town, work all day with the teams there, and any issues or any strategy that has to be discussed verbally. You do not need PowerPoint, charts or large strategic presentations to bring that. You can actually talk about it like friends. By the end of it, you find that you have contributed together towards solving the problem and you also understand what is important through your counterparty. It may not be so important to you. You may not understand what is important because you do not have the culture-nuance of what is the really important piece. It is only by spending time, by using the two ears and one mouth that you actually start to understand what is really important. Once you understand what is important, then you can actually help your partner progress in areas that they consider important, rather than what you consider important.

Ed: Fantastic. So, Adi, I think you have also very unique experience because you spent 7 years in China and North Asia. At the same time, you also spent a lot of time back in the headquarters. In fact, you became the president of one of the biggest businesses at the headquarters. You have looked into China both from the standpoint of being in China and also from the standpoint from headquarters to China. You have two different perspectives. What would be your advice to general multinational companies when they come to China? How to look at China from both dimensions?

Adi: From the headquarters' perspectives, I think the first thing to be aware of is how important China is. From an innovation capability point of view, the potential of step-changing growth in China is not only what Chinese market does to your growth numbers at the company, but also what it does to you as a company, because you can take your Chinese innovation out. Actually, for many companies, being inconclusive and being able to work in China can be challenging. If you can do that, that actually gives you great learnings on how to work in other parts of the world as well.

Certainly, it is really important to grow in China, which requires you to have the right expectation for China. Over the long term, you want to expect that China is your first or second growth driver, even if it is the No.25 country in size today. If the growth is not happening over a decade, then you are making a mistake somewhere.

The third thing I would say is that we tend to overestimate China in the short term and underestimate China in the long term. Very often from headquarters, we are not achieving our targets every year in China, but because of that, we keep changing direction and that prevents us from compounding on the S-curve that would absolutely blow our targets out of the water, five or six years from now, as long as we deliver stability in China.

Stability in China is very important, especially in management and in outlook. Stability means being reasonable, not flapping around too much, not doing the yo-yo, or not changing your management teams 25 times. It is very important to give your Chinese team reassurance and stability. That only happens when you can have the right leaders and the right partners in China. China is a country where leadership is super important. Chinese team will look to their leaders almost like the head of the family. While there may be disputes, positives and negatives, nobody doubts that the head of the family has the interest of the family in mind.

That is also in the sense how Chinese people look at the Chinese government. There is a huge amount of trust there. You better have somebody there who can function in that role as the head of the family.

People in China follow leaders. They do not necessarily follow strategy. The leader is the embodiment of the strategy, so in China you want to have somebody who is a virtuous leader, who can build followership, who can build a 5-year or a 10-year consistent traction. You want a virtuous leader who is curious, who has a little bit of time to look at all the innovation that is happening in

China and spends time and effort thinking about how that can be brought in to transform the growth engine of the company. If you are capable of such abilities, which means that you can have a virtuous leader, you can be outward looking in China and experiment all the time, manage your own expectations as a company in the short term and do not limit your expectations in the long term, and be aware that you will have to have a different strategy in a different operating model for China, then there is a very good chance to succeed in China.

Ed: But a lot of the MNC executives in China tell me that Ed, China's culture and societal aspects are so different than mine or ours. How did you navigate in this very different culture and societal values? From our standpoints, what would be your advice to these people?

Adi: I think in every place, every game has rules. You need to understand the rules of the game as you start playing it. There is no point starting to play football with a cricket team and expecting them to play by football rules when all they know is the cricket rules. When you are in China, people spend a lot of time learning the Chinese language and I think that is good, but I think it is more important to learn how Chinese people think than what Chinese people say. You can always find someone to translate for you, but the thinking is the most important thing. China has deep civilization that goes back to five or three thousand years ago. The civilization grooves certain patterns of thinking and working and doing, which are actually much older and deeper than the West. You don't see it because it is all submerged under the surface.

Chinese can be very respectful and therefore not very demonstrative. They will not tell you in a more euphemistic way what the issue is.

So, in China, you have to listen for the silences. If you're making a mistake, your team will tell you by their silence. If you are in tune with your team, you will always know you are making a mistake in China because they will find a way to communicate to you. You just need to be listening. Thus, you have to listen all the time in China. You have to keep building your database of what the societal norms are, like I said before.

Taking an example of negotiation, as a western person going into China, you are expecting that after a hard negotiation, now the deal is signed and you're going to harmoniously work together and everything is good, but the Chinese partner is thinking that now this person has proven some level of trust. I will bring the real requirements out and then we are really going to start discussing things. The western person may think this is not ethical, and the Chinese person may think this western person is very naive. Both of them are conditioned and programmed by their history and by their upbringing, so have the empathy to try and submerse yourself into this environment and understand why it happens. First of all, assume good intent, and then understand why that person did, and what they did. Spend the time doing and build that into your mental model of China, and then your mental model will keep improving, eventually you will be able to do business in China. In reality, Chinese people are very trustworthy. They are very honest and clear. They are telling you clearly, but you are not listening.

Source: Google

Ed: I think Adi you are very unique in a way. You work in a global multinational company. You are one of the most senior persons in the whole entire company on a global basis. You have roots in India - you came from India. You work for quite a long time in China. With the fact of your Indian roots and the fact that you worked in China, how did that help you really better appreciate China, perhaps because of some similarities between Indian culture and Chinese culture? How did it help you to understand China, and what advice would you give to the global managers from that internalization?

Adi: I think there are very deep similarities between India and China, even just philosophically. If you go back far enough in history, then you will see that a lot of this comes from the roots of Buddhism or Hinduism, that eventually some bit of it turned into Buddhism, some of it moved to China, and then it evolved further in China and moved to other places. For thousands of years, people have been taught in certain patterns, and those patterns are relatively similar between India and China.

This societal programming and conditioning, actually for me as an Indian, I felt very much at home in China. China has warm culture, where people are looking to help you. It is similar in India from that perspective. Being able to create a network of trust in China is like a network of trust I have in India. I think it’s really good. Chinese people have the same kind of inventiveness that Indian people do in a sense. They always try to find a solution to a problem. It may not be a traditional solution. They always find a way to do it more efficiently and cheaper, and to save some money on the side.

There are so many similarities. If you are looking for the similarities more than the differences then you will find them, but if you look for the differences you will only find those differences.

Ed: Fantastic. Perhaps the last question Adi, you were in China for 7 years but you have also been away from China for 7 years. Seven years is, well, short but it is also long. In these 7-year time session that you have been away from China, what changes have you seen about China? Does it change the way that you think about China? Does it change the way that you would recommend a global company when it comes to China?

Adi: Well, a lot has changed in 7 years and actually what happened was the unraveling of globalization to some degree. The world is becoming more bipolar again. I think America and a lot of people in the West have finally realized the level of development and advancement of China, not just as a manufacturing economy but as a true engine of innovation. That actually, along with the mathematics of money, points to the potential of a changing world order. Whether that is potential or inevitable, it is something that there may be different views about.

This has resulted in more protectionism. Also, globalization has been hit quite hard because of Covid, because global supply chains have contracted and now people have realized that actually you need to have local supply chains. Globalization has also been hit, in my opinion, by global warming, with the need for global supply chains to become more local in the future too.

It means that, China as a manufacturing hub for global companies is perhaps getting a bit more difficult and also more expensive. I think companies are pivoting. In the past, China had a massive role in supply chains along with, of cause, the growth that you have in China, and for some companies who have been smart, a role in innovation. I think over a period of time the role in supply chains is perhaps coming down, or getting disrupted at least.

Also, it has been difficult to travel into China for the last couple of years with Covid, with different ways that countries have to manage Covid where the West is now broadly open. The UK has now even removed testing on people coming in because they think they are done with the virus. Whereas in China, it is still very protected. This has resulted in ties being stretched and cut off. But I do think that at the heart, they are the two ends of civilization. There is a bit like Yin and Yang (阴阳). They cannot really do without each other. That is the whole point about Yin and Yang, right? If there is Yin, there needs to be Yang.

So there needs to be two centers in the world, and ideally these two need to operate in harmony, in consonants, so that the black and white when you spin it together, become beautiful white - it becomes one color. If that happens, you could have a fantastic new global order, which is really built on growth and cooperation on the best of both in a sense. But it is more difficult to see that with the way things are going as positions harden on both sides. However, companies can always decide this for themselves, to make the right investments and to really get the right benefits, but also to contribute back to China, which I think is so important.

Ed: Thank you, Adi. It has been wonderful. Every time I talked to you, I picked up a lot that I learned along the way. Similarly, this time as well. So really thank you for your time. Before we go, just one last question. I knew that you retired from Reckitt, but I noticed that you are not leaving China. You are still doing work related to China. Perhaps you can give us the last comments about your latest developments with respect to your individuals about China.

Adi: Sure. Being connected to China and being able to understand a bit of what is happening in China is a superpower, and I don't want to give up it. I am also deeply connected to China. I think it is very important for anybody who tracks innovation globally to track what is happening in China. So, I have taken up a role as a non-executive director in a company called JPMorgan China Growth & Income. It is a FTSE listed company that actually has a mandate to invest in China. I hope to be able to contribute some of my learnings and insights about China on that board, but also at the same time, I hope to learn, in a very consolidated fashion, what is happening in China, and to be in touch with China, which is so important to me.

Ed: Great. That is great news. I look forward to staying in touch with you and continuing to have a dialogue and to track your progress. I know you will continue to do really well for yourself, and also between Europe, China and the rest of the world.

Adi: Awesome. Thank you so much, Ed.

Ed: Thank you, Adi.

Epilogue

Adi Sehgal really “gets it” when it comes to building and running a business in China for global companies. In him, I found a strong sense of humility, willingness to listen and to learn, and a collaborative mindset. Clearly, his deep connection, with Reckitt’s global headquarter and his ability to articulate complicated thoughts and ideas with people in the headquarter was essential.

As a result, the China team at Reckitt was suitably empowered to make the right choices on the ground. After Reckitt made China its second largest market in the world, it decided to sell its baby formula business in early 2021. So today, China is no longer the company’s second largest market.

About the Interviewee

Aditya Sehgal is an experienced business leader who recently retired as President from Reckitt - a FTSE 20 company which is a global leader in Health, Hygiene and Nutrition. At various times during his 27 years with Reckitt, he led the global Nutrition and Health business. He led the creation and growth of eRB - Reckitt's ecommerce, venturing and partnerships arm, which is the core growth driver of the global business. He spent 7 transformational years in China and North Asia where the business grew dramatically and became a leading contributor to global RB growth and scale.

About the interviewer

Dr. Edward Tse is founder and CEO, Gao Feng Advisory Company, Adjunct Professor of School of Business Administration at Chinese University of Hong Kong, Professor of Managerial Practice at Cheung Kong Graduate School of Business, and Adjunct Professor at the SPACE program of University of Hong Kong. He is also a member of Global Future Council on China at the World Economic Forum, as well as a member of advisory boards for private equity and venture capital companies. He started his strategy consulting career at McKinsey’s San Francisco office in 1988 before returning to Greater China in the early 1990’s. He became one of the pioneers in China’s management consulting industry, by building and running the Greater China operations of two leading international management consulting firms (BCG and Booz) for a period of 20 years. He has consulted to hundreds of companies, investors, start-ups, and public-sector organizations (both headquartered in and outside of China) on all critical aspects of business in China and China for the world. He also consulted to Chinese local governments on strategies, state-owned enterprise reform and Chinese companies going overseas, as well as to the World Bank and the Asian Development Bank. He is the author of several hundred articles and five books including both award-winning The China Strategy (2010) and China’s Disruptors (2015), as well as 《竞争新边界》 (The New Frontier of Competition), which was co-authored with Yu Huang (2020).

Gao Feng Advisory 

Gao Feng Advisory Company is a professional strategy and management consulting firm with roots in China coupled with global vision, capabilities, and a broad resources network

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