Global

Details

  • Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 8/22/2013

Family Business, a key driver of Asian economies 

Key driver
Family Businesses are said to be the backbone of Asian economies, driving growth and private wealth creation for the region. In a recent Credit Suisse report on Asian Family Business, it was noted that family businesses “remain key players in the strategic industries, financial markets and commercial activities.”

Asian Family Business still in the first generation cycle

An interesting point noted in the report, is that many Asian Family Businesses are less than two decades old, with around 38% listed after 2000.


"Most Asian family businesses are first-generation firms, in contrast with many family businesses in Europe and the USA, which are already in their fourth or even fifth generation.” Hans-Ulrich Meister, CEO Credit Suisse Private Banking and CEO Credit Suisse Switzerland

Family business outperforms traditional market benchmarks

The global trend of firms with substantial family influence outperforming local equity market benchmarks is coming to the fore in the Asian market. Hans-Ulrich Meister goes on to say:


"This underscores the traditional strengths of family businesses due to long-term commitment and more consistent investment decisions by their business owners compared with stock-market driven enterprises.”


Asian family values further underpin the business performance, with many Asian Family Businesses being viewed as an inheritance and a valuable tool for preserving wealth across the generations.

Top trends for Asian Family Businesses

Top trends identified in the Credit Suisse Report include:


  • Traditional sectors, especially financials, industrials, consumer discretionary and consumer staple sectors are the most popular for Asian Family Businesses. The highest concentration of family business is found in these sectors.
  • South Korea, India and Taiwan were the only regions that witnessed a stronger presence of family business in technology-related fields.
  • “Family businesses have very limited exposure to capital intensive energy, telecom services and utilities sectors in Asia due to their lack of access to gain control over the highly regulated and state-monopolized industries.”

Asian Family Business Infographic

Based on the Credit Suisse report findings, graphic designer Santosh Kushwaha produced this infographic. It details some of the key statistics shared in the report, including:


  1. The growth of Asian Family Businesses since 2000
  2. The concentration of Family Businesses in North Asia and South Asia
  3. .The role of family business in Asian economies, and
  4. Performance of family businesses in relation to local benchmarks

Asian Family Business Infographic


Asian Family Business Infographic

Christophe Bernard

Christophe Bernard
I am a KPMG partner based in the French firm’s Paris office, responsible for encouraging the growth of our firms’ middle markets practice across Europe, Middle East and Africa, a majority of that market comprises of family businesses.
 

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