View from the Top: SGK’s Adam Ransom Speaks to Asian Market Performance in 2015
Portions of this blog post first appeared in the December 2015 edition of Packaging Business Insight Asia.
FMCGs across Asia have had some difficult challenges in growing their brands as they faced volatile economic growth in various Asian markets in 2015. Falling commodity prices, including significant drops in oil, copper, and iron ore, have pointed to an economic slow down. Even as the global economy started showing signs of gradual improvements, thanks to slow but steady recovery in the US and Europe, further slowdown in China’s economic growth has continued to keep everyone on edge.
And this was the year when economists decided that China’s official economic growth rate - which had been at around 7% per annum - was probably not very accurate, and that a 5-6% figure is a more likely figure and that the economy is in danger of weakening further. In fact, major concerns over China’s economic slowdown finally caused the Dow Jones industrial average to plunge 11% between 10-25 August this year,
So what does this mean for brand owners in Asian markets? And just as important, how have all these economic developments in 2015 affected industries in Asia’s packaging supply chain, if at all?
SGK’s Adam Ransom, Regional Managing Director in APAC, points out that despite the lagging economic growth and volatility, there are still signs for hope across Asia. Ransom noted:
In 2015, China’s slowing economy has dominated world news. However it’s important to put the downturn into perspective.
Growth is slower, but hasn’t stopped. Chinese FMCG brands remain bullish. Local brands are growing at much faster rates than global brands in the Chinese market. We’ve witnessed a surge of confidence in the ability of Chinese local brands to compete against global guns - in terms of function, quality and trustworthiness.
Meanwhile, Japan’s economy has also been notable for its lack of growth in a region of rock stars. This has energized Japan’s domestic companies expansion plans. The impact on brands? Japanese brands are localizing for high growth economies in South East Asia.
Exciting times ahead!
For further insights on Asian market performance in 2015, check out the article in its entirety at Packaging Business Insight Asia.