At IDC Manufacturing Insights, we've been hearing more from manufacturers about moving into emerging markets as a key focus for the coming year. We've also seen a number of offerings from IT suppliers targeted at supporting these endeavors into emerging markets.
A key theme in manufacturing for the coming year is the accelerated movement by many manufacturers into emerging markets. Many brand-oriented manufacturers particularly have identified much of their planned growth in emerging global markets that include China, South America, and the Middle East. And, as part of their strategy, they have identified Third Platform technologies like cloud and mobile as being key enablers for them.
My colleague, Simon Ellis, identified global trade management as a "critical capability in managing growth in emerging markets" in his Worldwide Manufacturing Supply Chain 2014 Top 10 Predictions (MI245094). In the report, he references a statistic from the OECD that states over the next 15 years, the global economy will see 1 billion new middle-class consumers, accounting for almost $14 trillion in consumption - 80% of which will be outside North America and Europe. Clearly, those manufacturers that have their sights set on emerging market are onto something!
The question becomes how to best reach these emerging markets with their troves of brand-aware, economically empowered consumers? This is where e-commerce enters the picture, and manufacturers are certainly taking notice. In my recent report, 2014 Manufacturing Commerce Top 10 Predictions (MI245067), I posit that expansion into emerging markets requires resilient commerce networks. IDC Manufacturing Insights expects to see overall growth in emerging markets, but markets will move in many different directions, creating unique opportunities and challenges in local markets. Therefore, manufacturers need to create commerce networks that have built-in intelligence to effectively manage regional/national trade requirements, and that leverage cloud and mobile to help expand the reach of these commerce networks at the edges.
Some recent activity among manufacturers and their IT suppliers indicates that market leaders are already putting into place systems and capabilities that enable them to effectively extend their presence into emerging markets. Consider the following representative announcements:
- In December, Infosys launched TradeEdge, a cloud-based sales platform designed to help manufacturers extend their global brands through distributors and retailers to consumers in emerging markets. TradeEdge seeks to assist with inventory visibility, distributor onboarding, shelf-level visibility of product presence, and order-to-pay capabilities via basic mobile phones. TradeEdge grew out of a co-collaboration with P&G, and the company is utilizing the TradeEdge platform for visibility into its downstream supply chain.
- Hybris, an SAP company, has developed the hybris Commerce Accelerator, which is a production-ready omni-channel commerce system that can be used by manufacturers and retailers to support web, mobile, call-center and order management. Hybris Commerce Accelerator is available in a traditional on-premise model, but also a SaaS model. An example of a manufacturer using hybris B2B Commerce Accelerator is Red Bull, who launched a B2B order management portal in March 2013, and in June completed roll-out to 79 countries. Hybris also recently announced the hybris B2C Commerce Accelerator for China Market, with functionality geared specifically toward the Chinese consumer.
- Ajlan & Bros, a large Saudi Arabian apparel distribution company that designs, manufactures, and distributes clothing across the Middle East, recently selected Oracle Commerce to drive further expansion in the Middle East and beyond. Ajlan & Bros is using the technology from Oracle to deliver a unified and consistent omnichannel customer experience for its distributors, retailers, and consumers.
The above examples all highlight the increasing importance of expansion into emerging markets for manufacturers and how IT suppliers are supporting these initiatives with products and services that leverage Third-platform technologies like cloud and mobile. In our newly launched Manufacturing Commerce Strategies Service at IDC Manufacturing Insights, we'll be taking a closer look at how manufacturers are using sell-side commerce platforms to gain visibility into their end customer and how they are leveraging mobile, cloud, social and big data to expand into emerging markets. We welcome you to join the ongoing conversation.