Sales growth in rapid-growth markets three times higher than developed markets

Sales growth in rapid-growth markets three times higher than developed markets

Azerbaijan, Baku, 22 july /Trend /

Over the last five years, the average annual sales growth rate of companies from rapid-growth markets has been almost three times higher than a developed market benchmark, 16% versus 5%, according to new report Globalization 3.0 from Ernst & Young. The report compared the performance of 150 enterprises from rapid-growth markets with 80 leading US and European companies.

Nearly one-third of the world's 1000 largest public companies, by market capitalization, are now based in rapid-growth markets. This compares to only 10% coming from rapid growth companies just 10 years ago. Their growth is outpacing their domestic GDP growth. Of these, BRIC (Brazil, Russia, India, and China) companies represent 70% of the value.

Alexis Karklins-Marchay, Ernst & Young EMEIA Capital Transformation leader, comments: "World-class companies are now found everywhere and business leaders need to adjust to this new reality. If growth continues at present rates, half of the world's GDP will be produced in these rapid growth markets by 2015."

Sales growth - not just the "BRICs"

Overall, the biggest performers in sales growth have been India, where sales have climbed by a compounded annual average of 27%; Brazil, where sales have climbed by 22%: Russia, where they have grown by 17%; and China, where they have grown by 17%. But the high performers are not just from the BRICs. Sales growth over the past five years in Indonesia and Malaysia was 16%; 14% for Poland and 13% for South Africa. Some of these gains are due to the exceptional growth of their domestic economies. Others have benefitted from rising raw material prices, particularly mining and oil and gas companies.

Profitability better for rapid-growth markets

The return on sales for companies from rapid-growth markets is better than developed market companies. Average operating margins of the rapid-growth market sample reached 24% of sales, compared with 18% for the companies from developed markets. The operating margin of the Russian companies in the study rose particularly well, to 27%. Lower labor costs and a lighter regulatory hand are still the biggest contributors to margins in the rapid-growth economies but the margins are being driven increasingly by the fact that many of these companies are now world-class operators that command real intellectual property.

Stock price - rate of increase slowing

The stock price of the rapid growth market companies tracked in this study has increased by 132% over the last five years, compared to just 6% for companies from developed markets. However, the rate of increase seems to be slowing, as these economies become larger.

Acquisitions critical to growth strategy

Acquisitions continue to play a critical role in a company's growth strategy and we are now seeing transactions moving in every direction. Alongside the typical mature to rapid-growth deals, we are seeing deals between companies from rapid-growth markets and from rapid-growth markets to mature markets. In 2010, roughly one-third of the transactions were in North America, one-third in Europe and one-third in rapid-growth markets.

Karklins-Marchay concludes: "The strong growth in sales and profit in rapid-growth market companies in our study suggests that their growth is based on genuine economic gains. This is not to say that risks are banished but we believe the longer term trend will be for large rapid-growth market companies to continue to grow stronger and more numerous.

"This creates a complex new challenge for Western companies, as competitors now can, and do emerge from anywhere in the world. Finding enduring competitive advantage will not be easy."

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young expands its services and resources in accordance with clients' needs throughout the CIS. 3,500 professionals work at 18 offices including Moscow, St. Petersburg, Baku, Almaty, Astana, Kyiv, Tbilisi and other locations.

For more information about our organization, please visit

Azerbaijan Mortgage and Credit Guarantee Fund opens tender to buy printing devices
Azerbaijan Mortgage and Credit Guarantee Fund opens tender to buy printing devices
Azerbaijani Agriculture Ministry launches tender for external power supply to livestock farm complex
Azerbaijani Agriculture Ministry launches tender for external power supply to livestock farm complex
Azerbaijan Television and Radio Broadcasting company launches tender on installation work
Azerbaijan Television and Radio Broadcasting company launches tender on installation work
Loading Bars
Iran may extend cooperation on inspections with IAEA
Consumers must protect IoT devices - Fortinet
Azerbaijan’s Baku city has beautiful National Gymnastics Arena – Russian gymnast
Baku holds awarding ceremony of Rhythmic Gymnastics World Cup (PHOTO)
Azerbaijani team reaches finals in group exercises as part of Rhythmic Gymnastics World Cup (PHOTO)
WB plans to issue loan to finance another road project in Azerbaijan
Any attempt to glorify fascism is disgusting - Russian expert
Group team competitions underway in Baku as part of Rhythmic Gymnastics World Cup (PHOTO)
Azerbaijani ADA University sсreens film timed to Day of Victory in WWII (PHOTO)
Azerbaijan names finalists in exercise with clubs as part of gymnastics World Cup in Baku
Azerbaijani gymnast reaches finals in exercise with ribbon as part of World Cup in Baku
Iran providing much needed mechanization for farmers in Qazvin Province
Germany’s import of steel from Turkey up
Azerbaijani president allocates funds for construction of new school in Shusha
Funds allocated for construction, repairs of educational institutions in Baku
Uzbekistan interested in co-op with French pharmaceutical company
Funds allocated for creation of heat supply system in Azerbaijan’s Shusha
France’s import of steel from Turkey up
Iran's Energy Exchange announces products to be on sale on May 9
Azerbaijani Finance Ministry places medium-term bonds on auction
Cotton spinning factory of Turkmenistan’s Lebap region names production data
Chevron should remain cautious in further increasing oil & gas production
Azerbaijan to continue online lessons in 10th-11th grades, minister says
Foreign shipping lines expected to return to Iran
Austria increases import of steel from Turkey
Fars Province to be connected to north-east and south-east of Iran via railway line
1Q2021 value of operations via interbank national settlements system in Azerbaijan down
United Arab Bank turns around with Dh10.2 million net profit
Azerbaijan's MoD shares video about Shusha - cultural capital of Azerbaijan
New jobs created in Iran's Ardabil Province
Turkmenistan's Turkmengas opens tender for overhaul of gas turbine engines
Iran’s Bahar Azadi gold coin price falls
World Cup in Baku became one of my favorite competitions - Azerbaijani gymnast (PHOTO)
Khazar Consortium opens tender for purchase of controller
Value of Iran's import of Turkish steel in 4M2021 grows
Russia’s coronavirus reproduction rate remains below 1
Azerbaijan sets up new military units in liberated lands (PHOTO)
Kazakhstan increases exports to UAE
Best moments of second day of Rhythmic Gymnastics World Cup in Baku (PHOTO)
Kazakh gymnast shares impressions of Rhythmic Gymnastics World Cup taking place in Baku
Cult of personality of Garegin Nzhdeh in Armenia can be compared with that of Hitler in Nazi Germany – Russian analyst
Azerbaijan shares data on number of vaccinated citizens for May 8
EU sceptical on vaccine waiver, but ready to discuss proposal
Azerbaijan confirms 649 more COVID-19 cases, 1,720 recoveries
Iran declares details of exports from Ardabil Province
Uzbekistan projects volume of direct foreign investments for 2021
Exports via Iran's Sistan and Baluchestan Province up
Turkey's 4M2021 export of steel to Georgia surges in value
China boosts import of Azerbaijani products y-o-y
Azerbaijan's Central Bank unveils data on foreign exchange transactions over March 2021
Azerbaijani Ro-Pax type ferry reaches Kazakh port of Kuryk (PHOTO)
G-7 countries back Taiwan's observer status in World Health Assembly
Lack of minefield maps delays mine clearance - Trend TV
Uzbekistan’s 1Q2021 cars export revealed
Results of Azerbaijani gymnasts’ performance in exercises with clubs, ribbons as part of Rhythmic Gymnastics World Cup in Baku (PHOTO)
Turkish Energy Ministry prolongs oil, gas exploration licenses for several companies
Azerbaijani president displayed successful strategy on battlefield and in media - two tactics of Great Victory
Turkmenistan sees active dev't of cotton industry
Latvia reveals main economic indicators of bilateral cooperation with Georgia
Iran discloses number of restored mines in South Khorasan Province
Germany's confirmed coronavirus cases rise by 15,685
Azerbaijan's CBC radio starts broadcasting in Karabakh
Iran's Khorasan Razavi Province to increase trade with Turkmenistan
First Vice-President Mehriban Aliyeva made Instagram post on Shusha (VIDEO)
Iran to import Coronavirus vaccine - President Rouhani
Uzbekistan, Kazakhstan implementing road and railroad construction projects
Competitions in Baku always held at highest level - Slovenian gymnast
Azerbaijani Defense Ministry discloses events to be held on occasion of Victory Day - May 9
Buy/sell operations at Iran Mercantile Exchange revealed
Iran Khodro Diesel Company boots its production
Azerbaijan’s Baku city always warmly welcoming - Ukrainian gymnast
Uzbekistan's international reserves grow
Sri Lanka approves Pfizer COVID vaccine for emergency use
Turkmenistan signs decree on pardon for Qadr Night
Uzbekistan Railways plans to resume railway communication with Russia and Kazakhstan
Iran's IMIDRO begins study of public and comparative discovery in Albalaq mine
Azerbaijan’s Azerenergy company names winner of tenders for maintenance of IT equipment
Number of Azerbaijani insurance companies entitled to operate within Green Card system increase
Kazakhstan’s Intergas Central Asia company opens tender to attract services
Baku Stock Exchange unveils 4M2021 transactions on corporate securities
Azerbaijan expanding cooperation with Czech Republic in nanotechnologies
Iran reveals COVID-19 data for May 8
Uzbekistan suspends flights to Turkey and India
Scientific conferences, organized by Baku Higher Oil School on occasion of 98th anniversary of National Leader Heydar Aliyev, are coming to an end (PHOTO)
Uzbek ministry extends tender for pumping and power equipment
Saudi Crown Prince, Pakistan’s PM hold talks as bilateral agreements, MoUs signed
Russia records another 8,329 new daily coronavirus cases
Kazakh-Turkish JV launches tender to attract equipment inspection services
Iran's Shahid Tondgooyan Petrochemical Company plans to increase production
Azerbaijani Central Bank makes allocations for software platform support
Israel among 12 ‘green’ countries okayed for UK summer travelers
Rhythmic Gymnastics World Cup in Baku organized at high level - Georgian gymnast
Kazakh oil refinery opens tender to attract examination services
Int'l Judo Federation thanks Azerbaijan for return of previously detained Armenian judoka
Kazakh Gas Processing Plant opens tender on supply of diesel fuel
Interest in Georgian aviation market growing amid COVID-19
Auto sector urges U.S. Congress to help fund its computer chip needs
Iran’s ISOICO declares amount of attracted funds
Mine clearance work on Fuzuli-Ahmadbayli highway continues in Azerbaijan (PHOTO)
Turkmenistan exceeds plan for transport, communication sector
All news