Developing and Emerging (D&E) Markets

The case studies indicate the potential that exists in India even as standalone cases. Giant strides towards global competitiveness at least in terms of the process and design, if not also in terms of cost product quality, or marketing have been enabled by large scale IT adoption in the sector.

Case of Unilever:

Unilever is targeting an opportunity to tap into one billion new consumers who are expected to crop up in the developing and emerging (D&E) markets over the next decade. Industry analysts feel that latching on to this opportunity of one billion new consumers in D&E would be critical for all consumer product companies, particularly multinationals.

Those companies which manage to grow ahead of the market will be in a better position to grab the one billion new consumer opportunity, feel analysts. Turnover wise, after Hindustan Unilver, other large FMCG companies are Nestle, Britannia, and Dabur

Unilever’s objective is to serve 75% of the world’s population. Considering that a large number of new and young consumers is likely to come from D&E markets, the group’s future growth will in all probability come from this zone. GDP of D&E region at $33.8 trillion has already eclipsed GDP of the developed world ($31.9 trillion). D&E also has a faster growth estimation rate of 6.8% compared to 2.5% of the developed world.

Even in the automotive sector, the growth story shows a parallel trajectory. The Indian automobile components industry has emerged as one of India’s fastest growing manufacturing sectors, and a globally competitive one. According to the Auto Component manufacturers Association (ACMA), the apex body of components makers in India, global sourcing of components from the country is set to double from $2.95 billion to $5.9billion in 2008-09, and is slated to hit $20 billion in seven years.

India is estimated to have the potential to the top five auto component economies by 2025. The industry has been experiencing a high growth rate of 20% over the period 2000-05 and is expected to grow at a rate of 17% over the period 2006-14. Similarly while growth rate of exports has been 25% during 2000-05, the growth rate is expected to grow by 34% during 2006-14.

Global automobile manufacturers are consistently streaming their business process by outsourcing their non-core activities to low cost countries lie India. With the global auto component industry expected to touch $1.9 trillion by 2015, around 40% ($ 700 billion) is potentially expected to be sourced from low cost countries like India. Currently, of the total global auto components trade of $185 billion, India’s share is a mere 0.4%. According to ACMA, auto component sector generated sales of about $15 billion in fiscal year 2006-07, including $ 2.8 billion worth of exports. Industry sales will swell to $40 billion by 2016 with $20 billion coming from exports.

The business environment in India is so good that it is virtually shining with more and more business confidence. The business climate in India has improved further.

According to a survey all the six optimism indices namely, Volume of Sales, Net Profits, Selling Prices, New orders, Inventory levels, Recruitment of employees have shown improvement over the previous quarter level.

We live in a world of rapid change and a growing density of human and technological networks, where information and knowledge propagate at light speed and people and goods move around the globe as never before, it is in this integrated world where business has a crucial stake in economic development. For Indian companies, adapting to information technology to grow beyond their borders is a surety for success in the global marketplace.