People on a street watch television sets displayed in a shop in Nairobi, Kenya. AFP/Getty Images
As large multinationals seek ways to seize the economic growth in emerging markets, it is the smaller local private-sector companies that focus on their home markets who have positioned themselves as top competitors. A new study by the Boston Consulting Group presents a list of the top 50 local dynamos, companies that have converted the constraints of emerging economies into profitable opportunities; businesses that have moved beyond creating advantages built on cheap labor to become thriving commercial enterprises. The title of the report is ‘How companies in emerging markets are winning at home.’
Even if their names aren’t necessarily recognizable around the world, these companies have positioned themselves in such a way that they have built strong recollection in the domestic grounds they operate on. As the paper points out, ”Local dynamos are not global challengers, companies from emerging markets that are becoming worldwide leaders in their respective industries. Neither are they necessarily global challengers in waiting. They are simply thriving at home with a focus on local markets.” It comes down to the fact that they are surpassing both local state-owned companies with built-in advantages and large multinationals with deep pockets eager to find new growth opportunities.
Take a look at the top 50 on the list if you want to keep tabs on which companies have made a name for themselves and built their own space in emerging markets. Businesses that are part of a larger picture, the globalized world, who are able to maintain their freshness and drive their national economies. Here is the list of ”companies that were broadly representative of the forces and domestic industries driving success in their home markets” and that was compiled through a two-step qualitative and quantitative approach.
Up to 31 businesses of the total on the list are service companies, proving that the emerging economies are increasingly consumer-driven. From 2010 to 2020, more than two-thirds of the anticipated growth in consumer spending, or $11 trillion, will originate in emerging markets, suggests the study. The Boston Consulting Group says that the 2014 local dynamos have been growing faster than comparable companies in emerging and mature economies. From 2009 to 2013, their revenues grew by 28% annually. The reason for their success is that they cater to their customers and they understand the cost-and-quality calculus that will appeal to the growing middle and affluent classes in these markets.
As emerging markets will remain the biggest sources of growth for decades as a whole – by 2020, 6.4 billion people, out of a global population of 7.5 billion, will be living in these regions – these are the companies that you want to have on your radar.
