Emerging Market Enterprises Local Way to Win

July 10, Boston Consulting Group (BCG) released "2014 BCG Top 50 Giant Enterprise: Emerging Market Enterprises Local Winning Way" Report from China, Africa, India, Latin America, Middle East and Turkey, Russia, Southeast Asia, etc. 50 local companies in 20 countries in seven emerging market regions. Among them, 10 Chinese local enterprises were selected, ranking the first among all emerging market regions.

According to the report, the local giants refer to local enterprises that derive their satisfaction from the needs of their customers in the local market and dominate the competition with foreign ones. There are 10 local enterprises in China, including Minsheng Bank, Wanda Group, Sichuan Haidiaoyu, Home Inns, JDB, Jiangsu Hengrui Pharmaceutical, SF Express, Master Kong, Xiaomi and Yonghui Supermarket.

According to the report, the reason BCG's top 50 global giants win their competition with MNCs is that they have a deep understanding of local customers, discovering new customer segments, unmet customer needs, and local customer characteristics and habits , And these are usually traits that multinationals do not have.

At the same time, local giants know how to meet the needs of the growing middle class and affluent consumers in emerging markets through cost-effective efforts to overcome the constraints of emerging markets and provide first-class services to their customers.

The top 50 BCG homegrown companies in 2014 have been growing faster than similar companies in emerging and mature economies. From 2009 to 2013, these local giants reported revenue growth of 28% per annum and total shareholder return of 26% per annum, far exceeding the benchmark for similar companies.

Judging from the industries in which the above 10 Chinese local giants are located, most enterprises belong to the service sector. According to the plan of vigorously developing service industries and strategic emerging industries in the next few years in our country, local enterprises in these industries will also make a difference by 2020.

In 2013, the State Council released Several Opinions on Promoting the Development of Health Service Industry. It shows that by 2020, the total size of China's health service industry will climb from the current 3 trillion yuan to over 8 trillion yuan. State Post Bureau data show that in 2013, China's express delivery business completed 143 billion yuan, and by 2020, this figure will exceed 400 billion yuan.

However, some experts also said that Chinese local enterprises, especially local state-owned enterprises, lack the ability to operate and marketing. Enterprises can not establish and maintain the brand image and can not form strong brand competitiveness. The report released by China Enterprise Confederation also pointed out that at present, Chinese domestic enterprises, especially large enterprises, still lack the ability to adapt to the rapid economic growth and there is a clear gap compared with large international enterprises.

Beijing News reporter Wang Shunkun