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Beatriz Quintana Saiz

on 14 April 2015

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Transcript of BUSINESS IN ASIA


How to keep roaring
Deteriorating Diplomatic Climate
Demography Across Asia and Rise in Labour Costs
Shift from Quantity to Quality
Internet threatens to disrupt Asia
Intense Global Competition
Lack of global presence: too domestic.

100 biggest firms in Asia only capture 30% in abroad sales.

100 biggest occidental firms capture 50%.

Over 40% of firms under 2 billion dollars of market value are located in Asia.

But instead, big firms are the ones that dominate exports.

Asian firms will have to face global competition:

Global supply chains and large economies of scale
Importance of brands
Research and development (R&D)

Fifth Challenge


Failed to extend abroad:

41% of 2012 world patents have been registered in Asia.
Asia accounted for 29% of global R&D spending.

China’s revenues from “core intellectual property” were only 4% of USA.


Only 10% of the 100 worlds’ most valued firms are Asian.
Less than 20th of its value is captured in China.
Most of its value captured by brands in America and makers of high-tech components.
Iphone Example
System of organization, people, activities and resources involved in moving a product.
Asian Factory.

Large economies of scale: reduce costs and produce in a higher amount.

Global supply chains

Emerging New Middle Class
Increasingly concerned with the quality of products and services.
Food Industry
Population of 1.3 billion people in China.

Other factors such as:

increasing competition from a growing global population
reduction of the country’s agricultural work force
changing diets of its population

However, one of the biggest profit-making opportunities.

Manufacturing Industry
Supply glut and an poor-quality products.

Does not help Chinese makers to accumulate technological know-how
If they add more value through their own efforts, their profits will increase and the middle class will meet their demand:
products that are safe and fit for purpose.
1. Inclusiveness in relation to environmental, social and economic benefits.
2. Efficiency and productivity of use of natural, human and manufactured capital.
3. Structural transformation that promotes social and economic values.
5. Limits in the economic, social and environmental spheres that are defined by a credible science, a strong science-policy interface and stakeholder dialogue.
4. Balanced investment in all forms of capital.
Growth with equality, efficiency, sustainability and dynamism.
This has created a new model of retailing:

moving the broader retail sector and putting it on a
fast track to a more digital future.
Pioneers in terms of making this virtual marketplace platform, through which merchants and manufacturers of all sizes can sell goods to consumers.
Expected to surpass the U.S. with more than US $400 billion in total transactions.

Some 90% of online retail sales in China are made via online marketplaces.

It can exploit the inefficiencies and higher costs of China’s existing retail market.
Rapid adoption of smartphones and other mobile devices seems likely to cause a “leapfrog” effect in which online penetration and e-commerce may occur more quickly than with personal computers and fixed broadband connections.
Jack Perkowski, “China's Growing Food Problem/Opportunity”, Forbes Magazine, (Asia, 2014) accessed at http://www.forbes.com/sites/jackperkowski/2014/09/25/chinas-growing-food- problemopportunity/

United Nations Publication, “Shifting from quantity to quality: Growth with equality, efficiency, sustainability and dynamism”, (December, 2013) accessed at http://www.unescap.org/sites/default/files/Shifting%20from%20quantity%20to%20quality%20Growth%20with%20equality%2C%20efficiency%2C%20sustainability%20and%20dynamism.pdf

Mario Pezzini, “An emerging middle class”, OECD Observer, (2012) accessed at http://www.oecdobserver.org/news/fullstory.php/aid/3681/An_emerging_middle_class.html

Agustino Fontevecchia, “India's 243 Million Internet Users and the Mobile E-Commerce Revolution”, Forbes Magazine, (July, 2014) accessed at http://www.forbes.com/sites/afontevecchia/2014/07/07/indias-massive-e-commerce-opportunity-and-the-explosion-of-mobile/

R. Dobbs, Y. Chen, G. Orr, J. Manyika, M. Chui and E.Chang, “China’s e-tail revolution”, McKinsey Global Institute, (March, 2013) accessed at http://www.mckinsey.com/insights/asia-pacific/china_e-tailing

Michael Oh, “Asia's E-Commerce Evolution”, Matthews Asia, (March, 2013) accessed at http://matthewsasia.com/perspectives-on-asia/asia-weekly/article-610/default.fs

Financial Times: http://www.ft.com/cms/s/0/db42ec8e-3fab-11e3-8882-00144feabdc0.html#axzz3WB49psi0

CNBC: http://www.cnbc.com/id/100387910

East Asia Forum: http://www.eastasiaforum.org/2013/03/18/asias-demographic-transition-over-the-next-30-years/

Thank you for your attention,

José Luis Bootello Mesa
Alberto Leroy Sáenz de Miera
Álvaro Olavide Montes
Beatriz Quintana Saiz

(1) In economic terms, Asia is more integrated than ever before.
37% of the world’s population.
China: 1.4 billion
India: 1.2 billion
(2)Huge demograpohic growth.
The demographic dividend
(3) Labor and capital are becoming more expensive.
Interest rates around the world may rise and state-run banks in India and China have lots of bad debts.

China's rising labor costs will help other South Asian countries gain a foothold in low-end manufacturing.
José Luis Bootello Mesa
Alberto Leroy Sáenz de Miera
Álvaro Olavide Montes
Beatriz Quintana Saiz

Bigger working force.
Fall in birth rates.
The increase in labor cost: an open window for Southern Asian countries.
A new virtual market place.
The path to expansion.
Keep calm and continue growing
India Example
Change the shape of economy

Cut costs

Improve choices for consumers
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