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CONFIDENTIAL
FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY
THE NEXT SWEDISH
GROWTH ERA IN CHINA
AND INDIA
PRESENTATION SUMMARY
December 2015
PRESENTATION SUMMARY
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
1 MARCH, 2016 BUSINESS SWEDEN 4
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
BUSINESS SWEDEN 1 MARCH, 2016 5
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
BUSINESS SWEDEN 1 MARCH, 2016 6
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
PRESENTATION SUMMARY
MARKET UPDATE
China
India
INSIGHTS FROM THE STUDY
China
India
BUSINESS SWEDEN 1 MARCH, 2016 7
AGENDA
BUSINESS SWEDEN 1 MARCH, 2016 8
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
BUSINESS SWEDEN 1 MARCH, 2016 9
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
Above 10 Mn inhabitants
Above 4 Mn inhabitants
Above 1 Mn inhabitants
SOURCE: INDIA BUSINESS CLIMATE REPORT & BUSINESS SWEDEN
BUSINESS SWEDEN 1 MARCH, 2016 10
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
BUSINESS SWEDEN 1 MARCH, 2016 11
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
BUSINESS SWEDEN 1 MARCH, 2016 12
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
PRESENTATION SUMMARY
MARKET UPDATE
China
India
INSIGHTS FROM THE STUDY
China
India
BUSINESS SWEDEN 1 MARCH, 2016 13
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]
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)
1 MARCH, 2016 BUSINESS SWEDEN 15
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
ESTIMATE OF IMPORTANCE TO COMPANY (1-5)
1 MARCH, 2016 BUSINESS SWEDEN 16
CHINA CHALLENGES
SOURCE: COMPANY WEBSITES, INTERVIEWS, BUSINESS SWEDEN ANALYSIS INDICATES TOP 5 – FURTHER ANALYZED ON THE FOLLOWING PAGE
BUSINESS SWEDEN 1 MARCH 2016 17
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
PRESENTATION SUMMARY
MARKET UPDATE
China
India
INSIGHTS FROM THE STUDY
China
India
BUSINESS SWEDEN 1 MARCH, 2016 18
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
1 MARCH, 2016 BUSINESS SWEDEN 19
INDIA KEY SUCCESS FACTORS
SOURCE: COMPANY WEBSITES, INTERVIEWS, BUSINESS SWEDEN ANALYSIS INDICATES TOP 5 – FURTHER ANALYZED ON THE FOLLOWING PAGE
1,7
2,4
3,7
3,8
3,8
4,0
4,0
4,0
4,2
ESTIMATE OF IMPORTANCE TO COMPANY (1-5)
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
ESTIMATE OF IMPORTANCE TO COMPANY (1-5)
1 MARCH, 2016 BUSINESS SWEDEN 20
INDIA CHALLENGES
SOURCE: COMPANY WEBSITES, INTERVIEWS, BUSINESS SWEDEN ANALYSIS INDICATES TOP 5 – FURTHER ANALYZED ON THE FOLLOWING PAGE
BUSINESS SWEDEN 1 MARCH 2016 21
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
Anna Liberg
Trade Commissioner, India