- Nearly half cite economic uncertainty as biggest risk
- Mobile technology presents opportunity for sales
Consumer Markets companies are showing greater appetite for risk reviews, as finance leaders and their boards meet more frequently to discuss the key risks according to KPMG’s latest global CFO Consumer Markets survey. The research found that weekly risk reviews more than doubled from just over 7 percent to 19 percent compared to two years ago, with fewer than 6 percent now conducting reviews annually.
The current economic uncertainty is cited by nearly half of respondents (44 percent) as the biggest risk that these global consumer companies face. This is followed by political instability (27 percent) where recent clashes have been seen in China and the Far East over large scale job cuts.
Consumer companies also cite supply chain issues as presenting one of their greatest operating risks in emerging markets. Recent examples include the explosion of the Fukushima nuclear plant in Japan, the political upheaval in Asia, floods in Thailand and earthquake in New Zealand, as highlighted in the recent World Economic Forum Report on Risk.
Gerry Penfold, Risk Consulting Partner at KPMG said:
“Both manufacturers and retailers with their diverse distribution networks and complex supply chains are often exposed to a wide-variety of risks, especially those operating internationally; traditionally, however, they have been less inclined to undertaken risk reviews at an enterprise-wide level. More regular communication with senior colleagues on risk issues will lead to greater resilience at a time of increased uncertainty and more tangible assurance for the board.”
As far as opportunities are concerned, the research shows that consumer markets companies believe mobile technology will be the key driver to maximise sales over the next two years. In the UK, over a third (36 percent) of respondents shared this view, compared to Germany (46 percent), the US (44 percent) and 50 percent in India.
Additionally, despite falling revenues in the sector, businesses are increasing their budgets in a number of areas such as new product development and digital commerce. 65 per cent of UK respondents, 70 per cent in France and 74 percent in the US said that digital technology was critical to their overall customer outreach strategy.
In emerging markets the speed with which mobile has become the key communications and commercial channel in retail is even higher, as 75 percent of respondents from Mexico, 81 percent from China and 93 percent from Brazil said that digital technology was critical to their strategy.
Gerry Penfold concludes:
“Emerging markets are surging ahead with the swift adoption of mobile as a device for communicating with customers and for facilitating transactions. In the space of just a few years, mobile has transformed the landscape for the retail and consumer sectors. Businesses now recognize it as a key tool for driving customer engagement, sales and awareness, both in developed and emerging markets.
“To reap the rewards of this expansion into mobile technology, I expect the most successful businesses will have a business-wide risk strategy in place to underpin their future long-term value and sustainable growth.”
- Ends -
Note to editors:
*KPMG’s report “Turning global risk into an opportunity” surveyed 350 senior finance executives in the retail, food, drink and consumer goods manufacturing industry. Respondents were spread evenly around key regions of the world, including North America, Latin America, Asia-Pacific, Europe, the Middle-East and Africa. The interviews were conducted in November 2011.
For further information please contact:
Judith Dow, KPMG Corporate Communications
Tel: 0207 694 8584 Mobile: 07786 197 718 Email: Judith.dow@kpmg.co.uk
KPMG Press Office: 0207 694 8773
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
