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High Growth Markets: Insights from KPMG’s 2016 Global Manufacturing Outlook
High Growth Markets - GMO 2016
Mark Barnes, KPMG’s Global Head of Growth Markets provides a perspective on the challenges and opportunities facing manufacturers in the High Growth Markets.
Key high growth markets data points from KPMG’s 2016 Global Manufacturing Outlook
- 38 percent of companies with existing investments in India will add significant new investment over the next 2 years
- 37 percent of those with investments in China will add significant new investment
- 28 percent of those with investments in Africa said they would decrease investment over the coming 2 years.
High growth market insights from Mark Barnes, KPMG’s Global Head of High Growth Markets
You don’t have to be a rocket scientist to know that manufacturers are looking to India, China and ASEAN as their next growth opportunity. All three markets, if you count the 10 countries that make up ASEAN as a single market, will continue to serve as global economic growth engines for the foreseeable future.
Traditionally, these markets have been viewed solely as low-cost manufacturing destinations, an opportunity for large multinationals to manage their bottom line. Increasingly however, we are seeing the boardroom conversations shift to focusing on the markets themselves.
- China has long been a market that manufacturers want to ‘sell to’ rather than just ‘manufacture in’.
- India’s continued strong growth and massive population offers myriad opportunities for manufacturers looking to grow their market share and top line.
- ASEAN, contrary to the notion above, is far from a single market yet and strategies for the countries that make it up are diverse: manufacturers want to sell to countries like Singapore, but they want to take advantage of low-cost centers in Vietnam, Indonesia and the Philippines. Manufacturers, therefore, will need to carefully consider their investment strategy for each market on a case-by-case basis.
This is not only a truism for ASEAN; it is also good advice for any manufacturer engaged in (or considering) an emerging market strategy. Each market is significantly different – ASEAN is made up of 10 different countries with different tax incentives, costs and infrastructure; Africa is made up of 54 vastly different countries – and manufacturers would be ill-served taking a ‘common’ strategy to different emerging markets.
Our experience suggests that the most successful companies are those that create a unique, yet very robust and dynamic strategy for each market, taking into account political, economic, cultural, social and regulatory realities on the ground, to ensure they are maximizing their investments to the fullest.
Two key questions
Q: What is the greatest threat to growth for manufacturers in high growth markets today?
Mark: Economic uncertainty.
Q: What are high growth market companies doing differently do drive growth
Mark: Untethered entrepreneurship.
GMO Sector insights links
- Aerospace & Defense: Insights from KPMG’s 2016 Global Manufacturing Outlook
- Automotive: Insights from KPMG’s 2016 Global Manufacturing Outlook
- Conglomerates: Insights from KPMG’s 2016 Global Manufacturing Outlook
- Medical Devices: Insights from KPMG’s 2016 Global Manufacturing Outlook
- Metals: Insights from KPMG’s 2016 Global Manufacturing Outlook
