February 13th, 2013
04:55 AM GMT
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(CNN) - The IMF says global growth in 2013 will be an uphill climb but projects growth to reach 3.5% with emerging markets providing much of that boost. We’re already seeing signs of this through the scope of corporate earnings. In January, corporate earnings drove stock markets up, thanks in large part to emerging markets. GE’s fourth quarter revenues rose 4% beating expectations. GE cited China and other emerging economies as the driver for them. Apple reported record quarterly profits. CEO Tim Cook said in an earlier interview with Xinhua News Agency, “China is currently our second largest market. I believe it will become our first.”

While it’s not new that emerging markets are giving much-needed horsepower against the headwinds of the US and the Eurozone, it is interesting to note that countries like China, Indonesia and India still hold a wealth of untapped potential for investors. Younghao Pu, UBS chief investment officer for Asia Pacific, points out that emerging markets account for 50% of global GDP, but only 20% of stock market capitalization. That means there’s a lot of potential to grow. He believes Tier 1 Chinese cities like Beijing and Shanghai are saturated, mature markets where growth is decelerating.

“In China, multinationals need to penetrate into Tier 2 or Tier 3 cities like Chengdu and Xian where the growth rate is stronger,” Pu says. “Different companies are using agencies and I don’t think that model is building up the potential there in those cities.”

One reason for under-investing appears to be multi-layered. The business advisory group, Economist Corporate Network, recently surveyed 500 corporate clients about the current business climate in Asia. The majority of responses were from Western multinationals. According to the survey results, the companies found “murky” investment climates in certain regions, regulations that swung from unpredictable to protectionist and difficulty in finding reliable local employees.

Hans Paul Burkner, chairman of Boston Consulting Group, takes a much more optimistic approach and looks at emerging markets from the inside looking out. He recently spoke with CNN about what he calls “global challengers,” companies from emerging markets that are growing quickly. These are companies like Malaysia’s Air Asia, China’s Alibaba Group and Brazil’s building products company Tigre.

"They are fast growth, high ambition…and acquiring business models in North America, Europe and Japan. You should not be afraid because it’s not that they are coming in, sucking out all the technology and walking home. They want to really build a position (globally.)”

soundoff (8 Responses)
  1. warero

    Reblogged this on ProduSoul.

    February 13, 2013 at 6:43 am |
  2. Marketing Research in China

    Thanks a lot for sharing! Very helpful indeed.
    China has a lot of interesting aspects, I think that is a good thing, but not all is good.You mentioned, I am really very interested.In fact, I have been in the observation and study many interesting changes, some recent phenomenon.Although in many ways in the rapid development of the place, but there are also a lot of disturbing.In fact, these interesting things to good direction development should be a good thing.Development who do not know what will happen.
    Thank you again!

    February 14, 2013 at 7:19 am |
  3. datruthsreal

    While I think a growing globel economy is great and needed, we must put together a real plan to open jobs for all Americans able to work. We can call it the, No worker left behind plan! We must or we become the weaker country!

    February 19, 2013 at 4:32 pm |
  4. slickrickmed

    Reblogged this on .

    February 22, 2013 at 5:20 pm |
  5. The American Times

    "According to the survey results, the companies found “murky” investment climates in certain regions, regulations that swung from unpredictable to protectionist and difficulty in finding reliable local employees."

    Addressing this survey excerpt: One key attribute missing is "In what sector?". Many times investors flee at the first sign of something "murky", as has been my experience working for the American Times when perception trumps reality. There is a lack of local know how and prowess.

    For example: Did you know that Armenia is a top destination for more and more Silicon Valley giants for R&D; including Synopsys and Microsoft along with a recent visit from an IBM delegation?

    In fact, I met with Mr. Hovik Musayelyan, Director of Synopsys Armenia today, who explained in perfect detail why the large US multinational firm chose Armenia as a regional hub. (the article will not be posted for 1-week but please do check back at that time at: http://www.the-american-times.com

    Did you also know that over 1Million Armenian Diaspora live in just Los Angeles alone!; bringing with them Western knowledge (and remittances, good or bad depending on how you look at it) back with them?

    Did you know that widely promoted and US taxpayer supported Republic of Georgia has no access to the enormous Russian market because an embargo? While Armenia maintains deep contacts with Russia making the market easily accessible?

    It seems to make logical sense to put a perspective on things before ruling out potential emerging markets that offer tremendous reward potential without necessitating a commensurate amount of risk.

    Thanks for your ears and eyes for a moment :)

    -The American Times

    February 26, 2013 at 2:43 pm |
  6. nishkaush

    Reblogged this on Saga of my first Startup and commented:
    These are the new markets/regions to be targeted by the online retailers!

    March 4, 2013 at 1:19 am |
  7. Eusebio Ehr

    From a societal point of view, marketing is the link between a society’s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers.":`;

    Best regards

    June 3, 2013 at 8:26 am |
  8. NYC fitness events

    I think about starting a global business in emerging markets across the world all the time. Great potential!

    February 21, 2014 at 3:37 am |

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