Our Common Goal: Growth
Growth is the engine of our economy, the main pursuit of businesses and the ambition of countless people. Growth is about hope and desire; the hope that our children have a better life than ourselves, the desire to accumulate wealth, the ambition to gain knowledge, acquire experience, but also to become a better human being. Growth per se may not be a good thing; it requires the right direction, speed and choices - and it has to be balanced in order to be sustainable.
While growth is the most sought-after goal of the 21st century, it is getting more elusive in the current economy, unless you live in China or are selling Apples. And that proximity to China is the opportunity that exists for Hong Kong businesses otherwise operating in a mature and possibly saturated market.
As growth is the common priority of businesses: what is driving growth, where it can be found, how it can be gained and sustained? We can distinguish 4 different ways of gaining market share and growing organic revenues ahead of competitors:
|NEW MARKETS||NEW PRODUCTS AND SERVICES|
|NEW CONSUMERS||LOYALTY AND ADVOCACY|
New markets – driving growth by taking existing or new portfolio to places where they haven’t traded before
New consumers – improving market share, growing penetration and successfully switching customers from competitors, within an established market and largely with the current portfolio of products and services
New products and services – discovering and creating opportunities for growth that go beyond the current mix, meeting unmet customer needs, creating new demands
Loyalty and advocacy – building on the relationship that the business has with key stakeholders, driving increased involvement and spend from them and making them stronger advocates of the brand.
Growth is particularly relevant for Asia, as it is nowadays the main engine of global economic growth. All local and multi-national companies operating in Hong Kong and the rest of Asia have growth as a primary objective; primarily by finding new markets and new consumers.
With 3.9 billion people, Asia holds 60% of the world’s population, quadrupling in the 20th century. Asia’s economy accounts for 35% of the world’s GDP, larger already than those of the USA or Europe. For businesses, the main attraction of Asia is its large, young and fast growing populations. Japan has a large, but also the oldest, population in the world and an older population does not only offer lower growth rates, but it is reluctant to innovate as well.
For many years, large populations were regarded as a threat or burden, but since China and India have accelerated their economic growth, large, growing populations are now seen as an opportunity. This accounts especially for products and services which are being consumed by the majority of the population, such as fast moving consumer goods, housing, durables, mobile phones and the internet.
The table below shows the countries which will continue to outpace mature markets, indicating that new markets will increase in importance.
The choices of how to pursue a growth strategy depend on a company’s ambition, its ability to cope with growth and the forecast return on investment. But with 5 of those 10 growth markets in APAC, the choices open to Hong Kong businesses are apparent. Growth starts with making choices.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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Wander Meijer is the Global Head International Research for TNS, a WPP company.