Global cos upbeat on consumer goods demand in emerging nations

Bullish on rising middle class in emerging economies including India, most of the consumer companies worldwide are upbeat about their growth prospects in 2011, says a survey.

According to a study by global consultancy firm KPMG International, three-quarters of the consumer executives surveyed anticipate an increase in consumer spending in their target markets and in their own companies financial performance this year compared to 2010.

The survey was conducted among more than 150 senior finance executives in consumer businesses across the world.

Increased customer base and expanding middle class in emerging markets have stimulated demand and consumer spending.

"Respondents were especially likely to identify emerging markets such as Asia, India and Latin American as strong regions for growth and that the growing consumer base and expanding middle class in emerging markets, as well as consumers' adoption of technology—will have a positive impact on their businesses," the report noted.

In North America, the report adopted a cautious outlook as production and merchandise costs remain a focus, while spending is expected to be flat in Europe.

In order to gain market share, consumers firms will depend mainly on organic route. Besides, some firms plan to enter new geographic markets –through opening new stores, adding distribution channels, or other manoeuvre.

Executives from Asia-Pacific, Latin America and Europe say they will pursue organic strategies, but will supplement their growth with M&As, while respondents from the US and Canada intend to employ organic growth methods as their primary tool for increasing market share.

Meanwhile, the report said that Information technology (IT) investment would plays a significant role in both cost and strategic growth initiatives.

Over 70% of respondents say their companies will invest in IT systems for customer relationship management, enterprise resource planning, business intelligence and forecasting.

Interestingly, 64% of executive surveyed believe that the ongoing situations in Japan and the Middle East will have little or no impact on their business operations in the long-term.

While in Asia Pacific, 80% of all respondents expect a sustained impact on economic growth over the next six to 12 months.