Annual consumption in emerging markets will rise to $30 trillion, from $12 trillion, by 2025. McKinsey experts discuss how multinationals can harness the biggest economic force in the history of capitalism.
Winning the $30 trillion decathlon: How to succeed in emerging markets
By 2025, more than half of the world’s population will have joined the consuming class, driving annual consumption in emerging markets to $30 trillion, from $12 trillion. Emerging markets could account for more than 70 percent of global economic growth during this period.
While executives recognize that winning in emerging markets is the key to long-term growth, many companies remain reluctant to commit resources and talent at scale. McKinsey research shows that the largest companies headquartered in developed economies currently derive only 17 percent of their revenues from emerging markets, even though these markets already represent 36 percent of global GDP. Moreover, despite advantages in scale, technology, and access to capital, multinationals often lose out to more nimble local competitors.
In this video, McKinsey experts Yuval Atsmon, Peter Child, Richard Dobbs, and Laxman Narasimhan highlight a number of business disciplines where global companies need to raise their game in order to compete effectively. These include resource allocation, innovation, brand building, sales and distribution, and the development of local leadership. In all, global companies need to master ten key disciplines, requiring a level of commitment akin to a world-class decathlete. As with a decathlon, winning depends on all-around excellence—sitting out an event is not an option.