the next swedish growth era in china and india - business sweden€¦ · the next swedish growth...

CONFIDENTIAL

FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY

THE NEXT SWEDISH

GROWTH ERA IN CHINA

AND INDIA

PRESENTATION SUMMARY

December 2015


MARKET UPDATE

China

India

INSIGHTS FROM THE STUDY

China

India

BUSINESS SWEDEN 1 MARCH, 2016 2

AGENDA

1 MARCH, 2016 BUSINESS SWEDEN 3

CHINA HAS DRIVEN GLOBAL GROWTH IN THE PAST

DECADE AND IS STILL THE LARGEST CONTRIBUTOR

SOURCE: EUROMONITOR, WORLD BANK

CONTRIBUTOR TO GLOBAL GROWTH

2%

5%

5%

7%

8%

10%

14%

19%

31%

Japan

Africa

Middle East

West Europe

Central & EastEurope, Turkey

Latin America

USA/ Canada

Asia Pacificexcl. Japan & China

China

% of World Growth 2005-2014

13%

12%

25%

8%

6%

24%

4%

3%

6%

% of World GDP 2014

ABSOLUTE GROWTH IN GDP

USD bn

2000 ∆ 2005 ∆ 2010 ∆ 2014

1205

2269

6040

10360

4x

10x

9x

x China GDP Equivalent to one Swedish GDP

CHINA’S GDP DEVELOPMENT INDUSTRY GROWTH INDICATORS, YTD


THE ECONOMIC SLOWDOWN IN CHINA IS EVIDENT, BUT

MAINLY AFFECTS TRADITIONAL INDUSTRIES

5,9

7,3

8,2

9,2

10,4 10,5 0,104

0,093

0,077 0,077 0,074 7,0

0%

5%

10%

15%

0

15

2010

2011

2012

2013

2014

2015e

Hu

nd

red

s

Exports GDP

-20%

-17%

-9%

-18%

-25%

-20%

-15%

-10%

-5%

0%

Electricityconsumption

Railway Cargovolume

Exports Imports

3,0

SOURCE: IMF, WORLD ECONOMIC OUTLOOK, 2015, BUSINESS SWEDEN ANALYSIS, 2015

Real GDP growth % 2010 – 2015e

Nominal GDP, USD Trillion

FUTURE

GROWTH


CONSUMPTION AND INNOVATION ARE TWO MEGA

TRENDS WHICH WILL DRIVE FUTURE GROWTH

SOURCE: BBC, CNBC, BLOOMBERG, CNN, WSJ, FORBES

INNOVATION

From resource to innovation

driven economy

R&D spending 284 bn USD in

2015

No 1 in number of patent

applications

CONSUMPTION

58% of GDP growth in 2015

630 m middle class by 2020

Foreign brands still attractive

Rapid growth of online sales


MOST INDUSTRIES HAVE AN EXCITING OUTLOOK IN

CHINA

80 NEW AIRPORTS BY

2020

630 MILLION INTERNET

USERS

1,29 BILLION MOBILE

PHONE USERS

400 MILLION PEOPLE

WHO ARE +60 OR

OLDER

30% TYPICAL CHINESE

HOUSEHOLDS

SPENDING ON

EDUCATION

60% AVERAGE ANNUAL

GROWTH RATE OF

INVESTMENTS IN

CHINA’S CLEAN

TECHNOLOGY

SOURCE: CHINA BRIEFING; EU SME CENTRE; CHINA INTERNET WATCH; DELOITTE; MARS MARKET

INSIGHTS; ASIA PERSPECTIVE

AEROSPACE

E-COMMERCE

HIGH-VALUE

MACHINERY

ICT

HEALTH CARE

PRIVATE

EDUCATION

LIFE SCIENCES

CLEANTECH

FOOD &

BEVERAGES


MARKET UPDATE

China

India


China

India


AGENDA


INDIA - THE FASTEST GROWING ECONOMY

Agriculture

Industry

Services 38%

53%

26%

30%

36%

17%

1980-81 2014-2015

GDP COMPOSITION Share of total

REAL GDP GROWTH Annual change in percent, 2004-2015

-2

0

2

4

6

8

10

12

14

16

04 06 08 10 12 14 16 18 20

China

India

World

SOURCE: INDIA BUSINESS CLIMATE REPORT & BUSINESS SWEDEN


THE GROWTH ARC OF INDIA

Mumbai – the financial capital,

home to major banks and stock

exchange

New Delhi – the city of

Diplomats and a growing

commercial hub

Bangalore – the silicon valley

of India, the aerospace hub,

and increasingly important

automotive city

Pune – center for Automotives

and first Swedish cluster 1960

Hyderabad – a growing IT and

Healthcare City

Chennai – the major

Automobile and Telecom

Destination

Surat

New Delhi

Bangalore Chennai

Kolkata

Ahemadabad

Hyderabad

Kanpur

Lucknow

Jaipur

Nagpur

Coimbatore

Bhopal

Madurai

Kochin

Varanasi

Visakhapatnam

Patna

Indore Vadodara

Ludhiana

Mumbai

Pune

Gujarat – investor-friendly state

that has grown rapidly last 5

years

Above 2 Mn inhabitants




SOURCE: INDIA BUSINESS CLIMATE REPORT & BUSINESS SWEDEN


FOUR “RALLYING CALLS” FROM THE NEW GOVERNMENT

TO THE INDUSTRY

SOURCE: GOVERNMENT OF INDIA

MAKE IN INDIA

CLEAN INDIA

SMART CITIES

DIGITAL INDIA

KEY INITIATIVES KEY REFORMS

ADOPTION OF GOODS AND

SERVICES TAX (GST)

MAJOR PUSH FOR INFRASTRUCTURE

IMPROVEMENT

LAND ACQUISITION REFORM


SWEDISH COMPANIES HAVE A BRIGHT VIEW OF THE

FUTURE

SOURCE: BUSINESS CLIMATE SURVEY 2014

24%

40%

4%

42%

45%

36%

36%

16%

60%

2012 2013 2014

Favourable

Neutral

Not favourable

12%

60%

8%

2%

0%

Much more favourable

More favourable

As before

Less favourable

Much less favourable

PERCEIVED BUSINESS CLIMATE TODAY EXPECTATIONS ON COMING 3 YEARS


MANY OF THE INDUSTRIES ON THE INDIAN MARKET

HAVE AN EXCITING OUTLOOK

SOURCE: GLOBAL JOURNAL OF MANAGEMENT AND BUSINESS STUDIES (HC)

400 NEW CIVIL FLEET

AIRCRAFTS BY 2020

13,6 USD BILLION WAS

THE SIZE OF THE E-

COMMERCE MARKET

IN 2014

ONE USD TRILLION TO BE

INVESTED IN INFRA-

STRUCTURE IN THE

12TH FIVE YEAR PLAN

13,4% IS THE EXPECTED GROWTH

OF MACHINERY IMPORTS IN

2015

20% GROWTH OF THE

INDIAN LIFE SCIENCE

SECTOR UNTIL 2020

100% IS THE PROJECTED

INCREASE IN ENERGY

CONSUMPTION UNTIL

2020

AEROSPACE

MACHINERY

E-COMMERCE

INFRASTRUCTURE

LIFE SCIENCES

HEALTH CARE

TRANSPORTATION

TEXTILE &

APPAREL

CLEANTECH


MARKET UPDATE

China

India


China

India


AGENDA

BUSINESS SWEDEN 1 MARCH 2016 14

INSIGHTS FROM SME STUDY

INSIGHTS FROM

SME STUDY

Business Sweden has conducted a study focused on business opportunities

for SMEs in China and India

20+ successful SMEs in China and India have been interviewed and shared

their experiences

A summary of Key Success Factors and Challenges experienced by SMEs

in these two markets are presented in the following slides

FULL VERSION

AND COMING

SEMINARS

The full result was shared in a seminar in Stockholm on Dec 16, 2015

Coming seminar will be held in Gothenburg and Malmö as well in February

To understand the detailed results and case study examples please reach

out to our Trade Commissioners in China and India respectively:

China: [email protected]

India: [email protected]

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCIuumOXAm8kCFYwVlAod9csChw&url=http://www.globoforce.com/gfblog/2014/recognizing-across-cultures-china/&psig=AFQjCNE4NrvqSEkxzV4S1CJ2x4tT9F_H8g&ust=1447988796311458

mailto:[email protected]




COMMON SUCCESS FACTORS

1 PRODUCT INNOVATION

2 LOCAL PRESENCE

3 BRAND AWARENESS

4 DISTRIBUTOR COOPERATION

5 MARKET RESEARCH

6 LOCALIZED PRODUCT OFFERING

7 CUSTOMER SEGMENTATION

8 ENGAGED INVESTOR/S

9 POLITICAL CONNECTIONS

ESTIMATE OF IMPORTANCE TO COMPANY (1-5)


CHINA KEY SUCCESS FACTORS

2,3

3,0

3,0

3,2

3,5

3,8

4,2

4,5

4,8

INDICATES TOP 5 – FURTHER ANALYZED ON THE FOLLOWING PAGE SOURCE: COMPANY WEBSITES, INTERVIEWS, BUSINESS SWEDEN ANALYSIS

2,0

2,4

2,9

3

3,1

3,1

3,3

3,5

3,5

COMMON CHALLENGES

1 QUALIFIED STAFF

2 DIFFERENT BUSINESS CULTURE

3 GUANXI (RELATIONSHIPS)

4 INTELLECTUAL PROPERTY

5 COMPETITION

6 COMMUNICATIONS

7 BUREAUCRACY AND RED TAPE

8 ENVIRONMENTAL ISSUES

9 BRIBERY / CORRUPTION



CHINA CHALLENGES

SOURCE: COMPANY WEBSITES, INTERVIEWS, BUSINESS SWEDEN ANALYSIS INDICATES TOP 5 – FURTHER ANALYZED ON THE FOLLOWING PAGE


FROM THE SWEDISH COMPANIES WITH CHINESE

OPERATIONS COME FIVE MAIN LEARNINGS

SOURCE: INTERVIEWS, BUSINESS SWEDEN ANALYSIS

INSIGHTS FROM

ESTABLISHED SMEs IN CHINA

A. INVEST & DEVOTE - DO NOT DIP YOUR TOES, DIVE IN

B. ACTIVE CHOICE

OF PARTNERS - CHOOSE, DO NOT GET

CHOSEN

C. BE LOCAL - SALES IN CHINA REQUIRES

LOCAL PRESENCE

D. PROTECT IPR - IPR IS MORE THAN PATENTS

AND TRADEMARKS

E. STAY AGILE - ADJUST, ADAPT AND THEN

RE-ADJUST


MARKET UPDATE

China

India


China

India


AGENDA

COMMON SUCCESS FACTORS

1 LOCAL PRESENCE

2 LOCALIZED PRODUCT OFFERING

3 DISTRIBUTOR COOPERATION

4 PRODUCT INNOVATION

5 CUSTOMER SEGMENTATION

6 MARKET RESEARCH

7 ENGAGED INVESTOR/S

8 BRAND AWARENESS

9 POLITICAL CONNECTIONS


INDIA KEY SUCCESS FACTORS


1,7

2,4

3,7

3,8

3,8

4,0

4,0

4,0

4,2


0,7

1,2

1,3

1,3

1,3

1,8

2,6

3,0

3,4

COMMON CHALLENGES

1 RELATIONSHIPS

2 COMPETITION

3 BUREAUCRACY AND RED TAPE

4 BRIBERY / CORRUPTION

5 QUALIFIED STAFF

6 COMMUNICATIONS

7 DIFFERENT BUSINESS CULTURE

8 INTELLECTUAL PROPERTY

9 ENVIRONMENTAL ISSUES



INDIA CHALLENGES



PERFORMED INTERVIEWS RESULTED IN A NUMBER OF

KEY INSIGHTS ON HOW TO REACH SUCCESS IN INDIA

SOURCE: INTERVIEWS, BUSINESS SWEDEN ANALYSIS

INSIGHTS FROM

ESTABLISHED FIRMS IN INDIA

A. UNDERSTAND THE MARKET

- TAKE TIME TO GET TO KNOW THE INDIAN MARKET

B. SECURE SUPPORT

FROM THE PARENT ENTITY - SUCCESS DOESN’T HAPPEN

OVERNIGHT

C. ESTABLISH LOCAL PRESENCE - SUCCESS IN INDIA HAPPENS IN INDIA

D. CUSTOMIZE & LOCALLY

ADAPT - ADAPT AND ADJUST

E. FIND GOOD

BUSINESS PARTNERS - TRUST TAKES TIME

CONFIDENTIAL

FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY

Tobias Glitterstam

Trade Commissioner, China

[email protected]

Anna Liberg

Trade Commissioner, India

[email protected]

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