Six sectors with growth opportunities, PwC
New research from PwC’s Growth Markets Centre has identified six key global sectors that are poised to capitalise on market growth opportunities.
The report, ‘Winning in maturing markets’, highlights areas with the potential to combat sluggish global growth, and rising economic and political uncertainties by establishing the foundations for other sectors to flourish.
Developing markets are expected to account for a 65% share in global GDP growth by 2021, provided that businesses continue to innovate essential capabilities that improve profitability.
David Wijeratne, PwC’s Growth Markets Centre Leader, said: “As we enter 2017, it’s clear that growth markets are on the verge of a new era of leading global growth in which they are projected to enjoy almost two times the absolute growth in GDP as compared to developed markets by 2021, and account for 65% of global growth within the next five years.
"This will create significant opportunities for private sector players looking to create and deliver value to the billions of people expected to join the middle class in these markets.”
1. Financial Services
Technological investments are improving the reach and accessibility of financial services, particularly with digital payment options and the growing involvement of non-traditional sector participants, like mobile operators.
The financial services sector grew faster than the overall economy across a range of markets in Asia, the Middle East and Europe between 2010 and 2014.
Looking forward, notable opportunities lie in China, Thailand, Indonesia, India and Bangladesh where domestic savings rates are projected to maintain a high of around one-third of GDP over the coming years.
2. Transport & communications
Connectivity infrastructure, across both transport and communication, is fundamental to growth in any country to facilitate and sustain high growth. As such, increasing mobile and internet penetration in both urban and rural communities is a key priority.
China, Brazil, India, Russia and Turkey are the five largest markets by sector size and the African markets of Nigeria and Angola have recorded strong double-digit growth since 2010.
Consumers in emerging markets have different profiles than customers in developed markets.
3. Health & education
Digital health and the adoption of technology-driven solutions is expected to increase worldwide, with growth markets looking at low-cost options to bridge existing gaps.
Dr Zubin J Daruwalla, Director of Healthcare and South East Asia Consulting at PwC Singapore, said: "Given the potential for emerging markets to take a digital healthcare leap, focusing on digital solutions addresses the problem of accessibility while the need for greater penetration of private health insurance provides a great opportunity for addressing the problem of affordability."
Household spending on education has grown by double-digit figures in China, Bangladesh and Egypt over the last five years.
4. Retail & consumer goods
The expansion of the digitally-connected middle class is boosting opportunities across domestic consumption, particularly for products such as clothing, entertainment, leisure and automobiles.
PwC US Global Retail & Consumer Sector Leader John Maxwell, commented: "Consumers in emerging markets have different profiles than customers in developed markets. They are younger, likely shopping on a mobile device rather than in a store or on a PC, and do not necessarily expect a traditional ‘High-Street’ experience."
The next wave of leaders… will get closer to their customers’ needs by co-creating suites of service packages and expand opportunities as they create new partnerships outside their core areas of expertise
The introduction of new production technologies is expected to further influence global manufacturing competitiveness.
Thailand, Indonesia and Mexico are positioned to become regional hubs for the automotive sector, while Bangladesh will lead with textiles and apparel, and Poland with food and beverages.
Barry Misthal, Global Industrial Manufacturing Sector Leader, PwC Switzerland, said: "The next wave of leaders… will get closer to their customers’ needs by co-creating suites of service packages and expand opportunities as they create new partnerships outside their core areas of expertise."
Sustaining growth in agriculture is of high importance to growth markets where the sector is a primary source of livelihood. Opportunities in the sector lie in production and consumption.
Primary Industries Co-Leader and Global Leader (Food Trust) at PwC New Zealand Craig Armitage said: "What will it take to feed 9 billion hungry people? The march of globalisation means that trustworthy and untrustworthy food systems are mixing.
"Increasing crop yields will not be enough by itself. The real opportunity is to produce more food better – by improving integrity, transparency and trust throughout the supply chain to feed the global demand for higher quality food."
What are the key growth opportunities in your sector? Tell us your predictions in the comments below.