The role of emerging Asian markets has changed and these markets are now the engine of profitable growth for global consumer products (CP) companies and retailers.

In order to capture this opportunity, companies must change the way they approach localisation – through greater local autonomy, granularity, focus and agility to ensure the consumer at the center, says Ernst & Young.

The global accountancy company conducted a report that canvassed the opinion of 276 Asia-based senior executives of leading CP companies and retailers in eight markets. It concluded that 69 per cent believe emerging markets will be the main driver of growth and profit over the next three years.

However, while Asia provides opportunities for global companies enduring tough trading conditions in mature markets, only 20 per cent of those polled currently report both accretive margins and sustained significant high growth.

“The pace of change in Asia is dizzying. Consumerism has matured over a short span of years rather than the decades witnessed in developed markets,” said Ernst & Young global consumer products emerging markets leader, Kristina Rogers.

“Global companies stalking growth in Asia are finding the well-established local and multinational players tough competition. Global companies need to be agile and light on their feet, by putting consumer value first and foremost, in order to win over the increasingly sophisticated and demanding Asian consumer.”

The key to long-term profit in emerging Asia is balance, and the report identifies eight business imperatives that CP companies and retailers must manage simultaneously in order to succeed which include:

1. Empower local leadership to be agile
2. Disrupt traditional approaches for local relevance
3. Be granular in understanding current and future profit pools
4. Create scale by placing bets across price tiers and channels
5. Balance efficiency with consumer immediacy
6. Cluster for synergies based on common characteristics
7. Flex the approach as the market develops
8. Create a culture that mandates disciplined execution

Andrew Cosgrove, Ernst & Young global consumer products lead analyst adds: “Profitable growth does not mean cutting costs. Global CP companies need to adopt a selectively localised portfolio approach across all the elements of the supply chain from conception to consumption. Whilst this approach incurs higher costs in terms of time and resources, versus a universal approach, it is a price that companies must be prepared to pay in order to capture profitable growth.”

According to Rogers, by 2016, emerging Asia will account for almost a quarter of global consumer products markets and 37 per cent of total consumer products growth. Companies wanting to win in Asia must adopt a highly disruptive approach to managing their business through selective localisation and above all, flawless execution, she said.