An increasing number of multinational companies are looking to Asia for growth. Despite the recent slackening in Chinese growth, 23% of companies see expanding into new markets as vital for the success of their business in the next three years, according to a recent Telstra Global Pan-Asia research report.
Telstra Global’s Head of EMEA and the Americas, Tom Homer, said: “Multinationals from around the world are meeting and exceeding their strategic and financial objectives in Asia.”
Ahead of the pack are UK companies, which are outperforming their peers in the Asian region. UK companies are over-represented among the star performers, which were defined as the top 5% of companies, based on past high performance and future promise of success.
“UK companies are performing particularly well in Asia” said Mr Homer. “Almost three-quarters say expanding into new countries in Asia is important to their success.”
China is the primary growth market for companies who see expansion into new markets as a high priority in Asia over the next three years: 50% nominated China as part of their strategic expansion plans. Additionally, companies are also focused on expansion into Singapore by 38%, Hong Kong 33%, and India 32%.
FTSE Companies With Large Exposure To Asia
Diageo‘s (LSE: DGE) (NYSE: DEO.US) Asia-Pacific business is established in the emerging markets. It is the leading international spirits company in Asia-Pacific, with over 30% of market share and the regional number of legal drinking age consumers is increasing by approximately 50 million each year, mostly in China, India and South-East Asia. Diageo wants 50% of its business growth to come from emerging markets by 2017 and is aiming to lift Asian sales to 25% of overall revenue by then, according to its Asia-Pacific supply chain support director.
Unilever‘s (LSE: ULVR) (NYSE: UL.US) Asia business accounts for 57% of total global sales and it has recently reiterated its strategic commitments in emerging markets. Chief Executive Officer Paul Polman commented: “Growth here remains well above that in the developed world and will continue to do so. We are therefore accelerating our investments in emerging markets and there is no change in our strategy.”
UK Government Nudges SMEs Into The East
The government is encouraging small and medium-sized companies to copy the successes of the big players and export to Asia, as Foreign secretary William Hague said: “There can be no doubt of the importance of Asian markets, as the world’s focus shifts from West to East. By 2030, spending by Asian consumers is expected to be around $32 trillion annually, or about 43% of worldwide consumption. So, the economic compass of British businesses should be pointing firmly East, and we are determined to support them in their efforts.”
