P&G China leans on brands, AI, local ties for new-phase growth

Procter & Gamble Co's China unit is betting on a combination of stronger brands, artificial intelligence and ecosystem partnerships to drive its next chapter of growth in the country, where a fiercely competitive consumer market is pushing brands to seek differentiation through innovation and value creation.

Jasmine Xu, president of Procter & Gamble China, said changing consumer expectations and rapid technological advances are forcing companies to rethink how they create value.

"Market growth is slowing and competition is intensifying, while consumer expectations for quality and experience continue to rise," Xu said. "New technologies such as AI are reshaping industries at an unprecedented pace."

Xu said P&G's response is to return to a consumer-centric approach and strengthen its capabilities across branding, innovation, technology and partnerships — four areas she identified as defining the next generation of consumer goods companies.

The first priority, she said, is building brands based on consumer understanding rather than short-term traffic generation. P&G's portfolio has achieved a 90 percent penetration rate in China, according to Xu, but the company's focus is on creating lasting consumer connections.

"We are committed to building 'mindset' brands, not merely 'traffic' brands," she said.

To support that effort, P&G surveys more than 20 million consumers annually, analyzes 30 million social media conversations and reviews 70 million pieces of e-commerce feedback, Xu said.

The company uses those insights to track changing preferences among Chinese consumers and adjust its product strategy.

Xu also highlighted innovation as a core competitive advantage, saying the company's research efforts extend beyond product applications into areas such as human physiology and material science. The company currently holds more than 55,000 active patents globally and secured 10,164 new patents worldwide last year, she said.

Innovation, Xu added, must extend beyond research laboratories and become an organization-wide capability spanning product development, supply chains and market operations.

Emerging technologies, such as AI, are also becoming increasingly embedded in P&G's manufacturing and supply-chain operations, Xu said. The company's production systems generate a volume of data equivalent to about 1 million books each day, which is analyzed using AI to improve quality control, optimize processes and enable predictive maintenance.

For example, the production of a single diaper involves millisecond-level monitoring through thousands of sensors and hundreds of operational parameters, Xu said.

She pointed to P&G's Beijing Innovation Center, the company's largest such facility in Asia and second-largest globally, as an example of this approach. The center serves not only as a research facility, but also as a platform connecting consumers, scientists, industry partners and emerging technologies, she said.

At the event, P&G China and the China Association for Consumer Products Quality and Safety Promotion jointly launched the "Into the Lab" initiative, which aims to showcase consumer-product research and development processes, from consumer insights and scientific research to testing and commercialization.

Sun Manqi contributed to this story.