Charlie Macdonald, Telstra - Collaboration and Communication: New Technology and Productivity Across...

Make for Asia: The emerging Asian middle class and opportunities for Australian manufacturing Charlie Macdonald | October 2014

Telstra Unrestricted

Make for Asia | Charlie Macdonald | March 2014 |

Setting the scene The manufacturing opportunities

How technology can enable access to the market

Agenda



Size of Market Total Middle Class Consumption, Regions

Ref: KHARAS, H. & GERTZ, G. 2010. The New Global Middle Class: A Cross-Over from West to East. Wolfensohn Centre for Development at Brookings.

2009

4%

1%

23%

7%

38%

26%

Middle East and North Africa

Sub-Saharan Africa

Asia Pacific

Central and South America

Europe

North America


23%

7%

38%

26%

2009


Size of Market Total Middle Class Consumption, Regions

Ref: KHARAS, H. & GERTZ, G. 2010. The New Global Middle Class: A Cross-Over from West to East. Wolfensohn Centre for Development at Brookings.

2030

4%

1%

59%

6%

20%

10%

Middle East and North Africa

Sub-Saharan Africa

Asia Pacific

Central and South America

Europe

North America

By 2030 Asia will have 3.2 billion members of the middle class



Meganiche By 2050, Asia will be home to 24% of people over 60. China has the largest number of older people, and Japan has the oldest

Preference for foreign food averaged to be an estimated 158 million in 2009 and 970 million in 2030

A high margin option for Australian manufacturers, only 23% of which currently provide a service

Contributes $10 billion annually to the economy, of which $3 billion are exports. China, Indonesia, PNG and India are priority markets


The more people earn, the greater the portion of income goes to discretionary spend.

Middle Class Asian Demand

INCREASED DISCRETIONARY SPEND

Growth in cars, electronics, and recreational equipment is surpassing primary goods in Asian economies.




Trading-up Fuelled by consumer desire to improve themselves the Asia story is one of increased trading-up; purchasing more expensive products and services with features as a sign of greater personal aspiration and affluence. What makes trading-up relevant to Australian manufacturing is the fact that many consumers in Asia believe that foreign brands are more capable of supplying more quality goods

Personal digital gadgets Household electrical appliances Personal care products Household care products Food & beverages


Asian customers value a firm’s ability to customise its product to local preferences.

A sense of individualisation drives expectation for a diverse set of offerings. This supports the progression from mass production to mass customisation.


INCREASED DIVERSITY OF CONSUMER PREFERENCE


A substantial number of consumers in emerging markets are willing to pay a premium for health products.

One recent survey showed that Chinese consumers are willing pay 10% more for “green products”.


PERSONAL & ENVIRONMENT HEALTH GAINS IMPORTANCE


Urbanisation is driving increased “grab and go” products and convenience. Sales of pre cooked meals is on the rise. By 2016 the Asia Pacific region will account for 40% of B2C sales.


STRONG DEMAND FOR CONVENIENCE


Mega Trends in Manufacturing


Asian market’s GDP will grow 6.4% per year between 2011-2020. USA will only grow 2.5% and EU 1.3%

Global water demand will increase 55% from 2000 to 2050 Global energy demand will increase 40% from 2009 to 2035

The main protein source for developing countries is from grain. For developed countries it’s from meat.

93% of the top Global companies report environmental and social activities

The rate of technological disruption will continue to increase and has the potential to alter production processes, supply chains and the competitiveness of companies


Manufacturing Opportunities


Business Model Innovation

Industry Collaboration

Connected Manufacturing

Resource-Efficient Manufacturing Personal & Environmental Health

Increased Discretionary Spending

Increased Diversity of Consumer Preferences

Demand for Convenience

Trading-up on the Rise

Resource Scarcity

Responsible Industry

Technological Advances

Emerging Markets

Food for All


Resource Efficient Manufacturing

ICT Collaboration Platforms

Additive Manufacturing/

3D Printing

Digital Product Design Software

Data Security for Digital Product

Designs

ICT Networks

Resource efficiency supports the principles of sustainable or green manufacturing by employing processes or technologies that minimise negative environmental impacts and conserve energy and natural resources.



Requires building an agile, flexible, highly connected business that is intensively innovative (usually built on strong R&D expenditure), responsive manufacturing processes, and rapid transition from prototype to product.

Cloud Services Additive Manufacturing/ 3D

Printing Technologies

Data Security for Intellectual

Property



Industrial Collaboration

Is closely linked with innovation, productivity and competitiveness

RFID, Micro-Electro-Mechanical Systems

(MEMS) & GPS

Data Analytics ICT Networks ICT Collaboration Platforms



The opportunity for connected manufacturing arises from the convergence of technologies; sensors, automation, intelligent robotics, embedded electronics and their internet connectivity.

ICT Networks RFID, Micro-Electro-

Mechanical Systems

(MEMS) & GPS

Data Analytics

Cloud Services

Mobile Devices

Integrated Sensors

ICT Collaboration

Platforms

Intelligent Robotics


The Enabling Technologies


RESOURCE-EFFICIENT MANUFACTURING

CONNECTED MANUFACTURING

BUSINESS MODEL INNOVATION

INDUSTRY COLLABORATION

MANUFACTURING OPPORTUNITIES

MANUFACTURING TECHNOLOGIES

ICT TECHNOLOGIES

Logistics Technologies


Cloud Services

Data Analytics

Data Security

Additive Manufacturing

Intelligent Robotics

Sensors

Automation


Manufacturing Opportunities



Industry Collaboration


Resource-Efficient Manufacturing Personal & Environmental Health

Increased Discretionary Spending

Increased Diversity of Consumer Preferences

Demand for Convenience

Trading-up on the Rise

Resource Scarcity

Responsible Industry

Technological Advances

Emerging Markets

Food for All




The emerging Asian middle class and opportunities for Australian manufacturing

Charlie Macdonald

@MacdCharlie

au.linkedin.com/in/macdonaldcharlie/

Thank you

Charlie Macdonald, Telstra - Collaboration and Communication: New Technology and Productivity Across...

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