Local-Dynamos-Infographic · Title: Local-Dynamos-Infographic Created Date: 9/27/2018 3:46:11 PM

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© The Boston Consulting Group, Inc. 2018. All rights reserved. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com. Please direct questions to [email protected]. Data in this infographic comes from Digital Maturity Is Paying Off , June 2018. BCG surveyed 1,900 companies in Europe and the US to estimate their digital maturity in terms of 37 dimensions of digital transformation. BCG collected data from senior executives at companies with at least 2,500 employees in the US and Europe (including Austria, France, Germany, and the UK). We examined ten diverse industries: automotive, banking, chemicals, consumer goods and retail, energy, health care, manufacturing, public sector, technology, and telecommunications. Energy, health care, insurance, and public sector are new to the survey. We assigned the responses values on a scale from 0 to 100 and weighted them to determine each company’s overall performance on BCG’s Digital Acceleration Index. We ranked companies with a DAI score of 67 points and above as digital champions, while we considered those with a DAI score of 43 and below to be digital laggards. 2007 2009 2011 2013 2015 2017 Local dynamos have deep insight into the rising expectations of urban and digital-first consumers increase in spending from 2007 through 2017 million trillion people who used the internet in 2017, mostly on mobile devices people who have moved to cities over the past decade billion A rising consumer class Rapid urbanization Digital-first shoppers 500 $7 2.4 These innovative and agile companies have at least $100 million in annual revenue and generate enviable shareholder returns and revenue growth Compound annual growth in revenue, 2014–2017 (%) GDP growth (%, PPP, constant prices) Economic crisis Recovery and beyond 10 2 Emerging markets continue to outpace mature markets—but the gap has narrowed Local dynamos 2018 S&P 500 MSCI emerging markets of Chinese consumers say they prefer Chinese-brand home appliances, with similar increased affinity for other products such as apparel of GDP growth or more since 2010 in emerging markets is credited to private consumption 46% 50% To satisfy the needs of emerging-market consumers, local dynamos aggressively harness digital tools Sources: This infographic is based on the BCG report Emerging Market Companies Up Their Game: The 2018 BCG Local Dynamos, October 2018. BCG analysis, Bloomberg, Capital IQ, Datastream, Economist Intelligence Unit, Euromonitor, Forrester Research, S&P Capital IQ, Statista, UN. Notes: Emerging markets are defined according to the 2016 UN World Economic Situation and Prospects report. Total shareholder return (TSR) is calculated on the basis of the financial results of the 38 public local dynamo companies by using monthly share prices from December 31, 2013, through December 31, 2017, and companies’ reporting currency. Compound annual revenue growth is for December 31, 2013, through December 31, 2017, and is calculated on the basis of companies’ performance in their reporting currencies and converted into dollars using historical year-end exchange rates. Internet users are defined as people of any age who use the internet at least once a month through a desktop, laptop, or mobile device. “Digital companies” includes companies that were created on the basis of digital technologies, as well as traditional companies whose implementation of digital technologies has been a key element of their success. 40% 60% Traditional companies Digital companies MOST LOCAL DYNAMOS ARE DIGITAL PLAYERS These consumers are a powerful demographic—and they have a growing affinity for the brands of local dynamos LOCAL DYNAMOS UNDERSTAND SAVVY EMERGING-MARKET CONSUMERS LOCAL DYNAMOS HAVE BEEN FUELING THAT GROWTH EMERGING MARKETS ARE ON A WINNING STREAK 2 3 0 6 9 12 Emerging markets Developed markets EMULATE the winning strategies of the local dynamos, including delivering high-quality products and capitalizing on digital tools and ecosystems STRIKE partnerships that reduce market entry costs, improve operational efficiency, and fill in critical capability gaps EXPLOIT their scale and resource edge to burnish their global brands and attract top-tier talent HOW CAN MULTINATIONALS COMPETE AGAINST THE LOCAL DYNAMOS? If multinational companies want to win on local dynamos’ home turf, they need to do three things: What’s Powering Local Dynamos BCG’s 50 local dynamos—fast-growing emerging-market companies focused primarily on their home markets—can oſten meet the increasing demands of local consumers better than their multinational-company rivals 15 They also cultivate robust digital ecosystems—networks that have helped them as they amass significant market share E-wallet player PAYTM owns 58% of digital payments in India, with 8 million offline retailers 100 2014 2015 2016 2017 150 200 50 Total shareholder return, 2014–2017 (indexed to 2014) 2018

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Transcript of Local-Dynamos-Infographic · Title: Local-Dynamos-Infographic Created Date: 9/27/2018 3:46:11 PM

Page 1: Local-Dynamos-Infographic · Title: Local-Dynamos-Infographic Created Date: 9/27/2018 3:46:11 PM

© The Boston Consulting Group, Inc. 2018. All rights reserved. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com. Please direct questions to [email protected].

Data in this infographic comes from Digital Maturity Is Paying Off, June 2018. BCG surveyed 1,900 companies in Europe and the US to estimate their digital maturity in terms of 37 dimensions of digital transformation.

BCG collected data from senior executives at companies with at least 2,500 employees in the US and Europe (including Austria, France, Germany, and the UK). We examined ten diverse industries: automotive, banking, chemicals, consumer goods and retail, energy, health care, manufacturing, public sector, technology, and telecommunications. Energy, health care, insurance, and public sector are new to the survey.

We assigned the responses values on a scale from 0 to 100 and weighted them to determine each company’s overall performance on BCG’s Digital Acceleration Index. We ranked companies with a DAI score of 67 points and above as digital champions, while we considered those with a DAI score of 43 and below to be digital laggards.

2007 2009 2011 2013 2015 2017

Local dynamos have deep insight into the rising expectations of urban and digital-first consumers

increase in spending from 2007 through 2017

million trillionpeople who used the internet in 2017, mostly on mobile devices

people who have moved to cities over the past decade

billion

A rising consumer class

Rapid urbanization

Digital-firstshoppers

500 $7 2.4

These innovative and agile companies have at least $100 million in annual revenue and generate enviable shareholder returns and revenue growth

Compound annual growth in revenue,2014–2017 (%)

GDP growth (%, PPP, constant prices)

Economiccrisis

Recovery and beyond

10

2

Emerging markets continue to outpace mature markets—but the gap has narrowed

Local dynamos 2018 S&P 500 MSCI emerging markets

of Chinese consumers say they prefer Chinese-brand home appliances, with similar increased affinity for other products such as apparel

of GDP growth or more since 2010 in emerging markets is credited to private consumption

46% 50%

To satisfy the needs of emerging-market consumers, local dynamos aggressively harness digital tools

Sources: This infographic is based on the BCG report Emerging Market Companies Up Their Game: The 2018 BCG Local Dynamos, October 2018. BCG analysis, Bloomberg, Capital IQ, Datastream, Economist Intelligence Unit, Euromonitor, Forrester Research, S&P Capital IQ, Statista, UN.

Notes: Emerging markets are defined according to the 2016 UN World Economic Situation and Prospects report. Total shareholder return (TSR) is calculated on the basis of the financial results of the 38 public local dynamo companies by using monthly share prices from December 31, 2013, through December 31, 2017, and companies’ reporting currency. Compound annual revenue growth is for December 31, 2013, through December 31, 2017, and is calculated on the basis of companies’ performance in their reporting currencies and converted into dollars using historical year-end exchange rates. Internet users are defined as people of any age who use the internet at least once a month through a desktop, laptop, or mobile device. “Digital companies” includes companies that were created on the basis of digital technologies, as well as traditional companies whose implementation of digital technologies has been a key element of their success.

40%60% Traditional companies

Digital companies

MOST LOCAL DYNAMOS ARE DIGITAL PLAYERS

These consumers are a powerful demographic—and they have a growing affinity for the brands of local dynamos

LOCAL DYNAMOS UNDERSTAND SAVVY EMERGING-MARKET CONSUMERS

LOCAL DYNAMOS HAVE BEEN FUELING THAT GROWTH

EMERGING MARKETS ARE ON A WINNING STREAK

23

0

6

9

12

Emerging markets

Developed markets

EMULATE the winning strategiesof the local dynamos, including delivering high-quality products and capitalizing on digital tools and ecosystems

STRIKE partnerships that reduce market entry costs, improve operational efficiency, and fill in critical capability gaps

EXPLOIT their scale and resource edge to burnish their global brands and attract top-tier talent

HOW CAN MULTINATIONALS COMPETE AGAINST THE LOCAL DYNAMOS?

If multinational companies want to win on local dynamos’ home turf, they need to do three things:

What’s PoweringLocal DynamosBCG’s 50 local dynamos—fast-growing emerging-market companies focused primarily on their home markets—can often meet the increasing demands of local consumers better than their multinational-company rivals

15

They also cultivate robust digital ecosystems—networks that have helped them

as they amass significant market share

E-wallet player PAYTM

owns 58% of digital payments in India, with 8 million offline

retailers

100

2014 2015 2016 2017

150

200

50

Total shareholder return, 2014–2017 (indexed to 2014)

2018