Asia-Pacific poised to take global lead in MES

Region to overtake Europe in services to help companies boost market share, study finds

PUBLISHED : Tuesday, 16 October, 2012, 12:00am
UPDATED : Tuesday, 16 October, 2012, 4:03am

The Asia-Pacific region will overtake Europe to be the world's biggest market expansion services (MES) market by 2015, with China among the fastest-growing markets, a new study says.

A separate study predicts less buying by Chinese shoppers will slow down the world's luxury goods market this year.

MES is an outsourced service that helps companies boost sales and gain market share. Europe was the biggest MES market in 2010, with MES revenue of US$615 billion. But the Asia-Pacific will overtake Europe by 2015, according to a study by international consultancy Roland Berger and Swiss MES provider DKSH.

Asia's MES market will grow 8 per cent per year until 2015 while the global MES market will grow 7.1 per cent annually from US$2.2 trillion in 2010 to US$3.1 trillion in 2015, the study predicts.

"Greater China enjoys one of the highest growths in Asia," Roland Berger principal Jennifer Wilson said.

In the niche fast-moving consumer goods sector, China's MES market would grow 12.2 per cent annually from US$75.9 billion in 2010 to US$135 billion in 2015, Wilson said.

A key reason for Asia's MES growth was that Asia's middle classes were expected to expand sixfold by 2015, she said.

"Asia is no longer just a workbench for the Western world but a dynamic consumer market," she said.

The proportion of the mass middle class in China's urban population would soar from 6.9 per cent in 2010 to 24.5 per cent in 2020, Roland Berger forecast. Mass middle class is defined as a household annual income of 100,000 yuan (HK$123,600) to 1 million yuan.

The second-fastest-growing class in China is the super rich, with an annual income of 1 million yuan per household, which would grow at an annual rate of 8 per cent, Roland Berger said.

But Reuters quoted a study by US consultancy Bain and Italian luxury goods trade body Altagamma that said sales growth in the global luxury market would slow to 5 per cent from 13 per cent last year at constant exchange rates as Chinese customers cut their spending.

This year the Chinese luxury goods market is set to rise 8 per cent at constant currencies to €15 billion (HK$150 billion), slower than last year's growth of 30 per cent, the report said.