China remains a strategically important market for multinationals (MNCs), however they also face a number of challenges as they expand their footprint in the world’s second largest economy. These include rising inland provinces, strengthening local competition, and an economy not immune to the current global economic malaise. MNCs therefore see an increasing need to adapt their strategies in China, in order to succeed.
KPMG Partners share their views on current opportunities and challenges for multinationals in China.
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The middle class made up only 21 percent of the population of developing Asian countries in 1990; it more than doubled to 56 percent by 2008. By 2030, the middle-class population will account for more than half of the overall population in most of the developing Asian countries. By then, Asia’s annual expenditure will amount to USD 32 trillion, or 43 percent of the global total.¹ The emerging middle class has left behind their days of poverty. Without the need to worry about basic survival, they now look towards consuming beyond their basic needs. From China, India and to the rest of Asia, people have shifted their focus from “subsistence” to “consumption”. The middle class has helped Asian emerging markets withstand the turmoil of the global financial crisis and, as a result, the economic outlook remains optimistic. Factors such as investment, monetary supply, capital market, labour costs, exports, domestic demands, creativity, brands and productivity are often mentioned in discussions about future economic development, but as the cornerstone of the economy, the middle class cannot be overlooked.
¹ Asia Development Bank (ADB) survey, 2010
Interview with Andrew Graham
CEO of Graham and Brown
In a time of downbeat economic predictions, particularly in parts of Europe, our findings revealed much hope, in that family businesses had growth firmly on their agenda.
In our inaugural feature for this section we look to analyse those findings deeper as we provide you with thoughts from Andrew Brown, CEO of the family owned business Graham and Brown regarding his focus on international markets.
Better business performance in a stagnant economy can often come from looking outside of your traditional markets, and around a third of UK family businesses expressed an interest in the benefits of exploring the opportunities available to them via the emerging economies.
For many family businesses, maintaining the value of the business for future generations is paramount and in the slow growth economies of Europe in particular, it makes sense that family businesses are looking for opportunities in the double digit growth economies in the East and Africa. A real hope for the future.
For the UK economy to begin to grow, the story has to be one of private sector-led growth, and family businesses will be key to this. As the interview with Andrew Graham, CEO of Graham and Brown demonstrates, successful family businesses are more than up for the challenge, and those with heritage and a good brand behind them are in an ideal position to appeal to the opportunities presented by the huge consumer populations in the emerging economies.
Andrew Graham is a third generation family business member of Graham and Brown, the Lancashire based wall decoration brand which was established by Harold Graham and Henry Brown in 1946. Here Andrew, Graham and Brown CEO, talks about their successful expansion into new emerging territories such as Russia, Eastern Europe, China & Australia.