South-South Strategy
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Growth tactics Emerging-market firms heavily reliant on developing economies will remain focused on East Asia for future growth, though interest in the Middle East & North Africa will increase. Meanwhile, companies that were already focused on developed economies will become increasingly so. Confidence on costs Emerging-market focused firms are more likely to be expanding their supply chains in other emerging markets, and they also see their production costs falling more than developed-market focused firms. Emerging-market companies focused on trade with other developing economies are sticking with this strategy, even as a US recovery attracts broad interest. The Economist Intelligence Unit in March 2015 surveyed 400 executives from eight emerging markets and overall found that firms are positioning themselves for a rebound in developed markets. However, firms that derive at least half their annual revenues from other emerging markets are not changing tactics, indicating confidence in future opportunities. Emerging-market focused companies: top sources of growth Respondents, % South-east Asia East Asia United States & Canada Middle East & North Africa 48% 47% 32% Central & South America 30% South Asia 29% Western Europe 27% 21% Emerging-market focused firms Developed-market focused firms Past year Next 3 years Emerging-market focused companies = Firms that derive at least half their annual revenues from other emerging markets Emerging-market focused firms Developed-market focused firms In three years, are you planning to expand your supply chains in emerging markets? In three years, how do you expect costs to change in your supply chains? Yes, 85% Yes,76% No, 24% No, 15% Decline by more than 10% Decline by 5-10% Decline by as much as 5% Around the same as now Rise by up to 5% Rise by 5-10% Rise by more than 10% East Asia South-east Asia Western Europe 48% 36% United States & Canada 35% 31% South Asia 30% Middle East & North Africa 27% Central & South America 26% Developed-market focused companies: top sources of growth Respondents, % South-east Asia East Asia United States & Canada Middle East & North Africa 31% 43% 56% Central & South America 24% South Asia 17% Western Europe 48% 30% Past year Next 3 years Developing-market focused companies = Firms that derive at least half their annual revenues from developed markets East Asia South-east Asia Western Europe 41% 26% United States & Canada 57% 54% South Asia 15% Middle East & North Africa 26% Central & South America 18% 9% 13% 17% 31% 18% 17% 25% 19% 23% 11% 6% 7% 3% 2% South-South strategy Sponsored by Standard Chartered Bank
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Transcript of South-South Strategy
Growth tactics Emerging-market firms heavily reliant on developing economies will remain focused on East Asia for future growth, though interest in the Middle East & North Africa will increase. Meanwhile, companies that were already focused on developed economies will become increasingly so.
Confidence on costs Emerging-market focused firms are more likely to be expanding their supply chains in other emerging markets, and they also see their production costs falling more than developed-market focused firms.
Emerging-market companies focused on trade with other developing economies are sticking with this strategy, even as a US recovery attracts broad interest. The Economist Intelligence Unit in March 2015 surveyed 400 executives from eight emerging markets and overall found that firms are positioning themselves for a rebound in developed markets. However, firms that derive at least half their annual revenues from other emerging markets are not changing tactics, indicating confidence in future opportunities.
Emerging-market focused companies: top sources of growth Respondents, %
South-east AsiaEast Asia
United States & Canada
Middle East & North Africa
48%47%
32%Central & South America 30%
South Asia 29%Western Europe 27%
21%
Emerging-market focused firms Developed-market focused firms
Past year Next 3 years
Emerging-market focused companies = Firms that derive at least half their annual revenues from other emerging markets
Emerging-market focused firms
Developed-market focused firms
In three years, are you planning to expand your supply chains in emerging markets?
In three years, how do you expect costs to change in your supply chains?
Yes, 85% Yes, 76%No, 24%No, 15%
Decline by more than 10%
Decline by 5-10%
Decline by as much as 5%
Around the same as now
Rise by up to 5%
Rise by 5-10%
Rise by more than 10%
East Asia
South-east Asia
Western Europe
48%
36%United States & Canada35%
31%South Asia30%
Middle East & North Africa27%Central & South America26%
Developed-market focused companies: top sources of growthRespondents, %
South-east Asia
East Asia
United States & Canada
Middle East & North Africa31%
43%
56%
Central & South America 24%
South Asia 17%
Western Europe 48%
30%
Past year Next 3 years
Developing-market focused companies = Firms that derive at least half their annual revenues from developed markets
East Asia
South-east Asia
Western Europe
41%
26%
United States & Canada57%
54%
South Asia15%
Middle East & North Africa26%
Central & South America18%
9% 13%
17% 31%
18%17%
25%19%
23%11%
6% 7%
3%2%
South-South strategy
Sponsored by Standard Chartered Bank
