How Emerging Markets are Reaching Out and Reigning In?

The Gartner’s “Supply Chain Top 25” report was basically more than identify global industry leaders and best practices. It is also beneficial for shippers in order to understand the ever-changing dynamics of emerging markets.

One side the physical movement of massive volumes of goods could be seen as the part of most shipper’s manufacturing and distribution plans, on the other side the digitization of supply chains in this new region could be seen changing various new rules. “There’s definitely a dichotomy in the strategy large multinationals take in support of emerging markets,” says Stan Aronow, research vice president at Gartner.

For instance, there is a strong chain brand of Unilever, to which its top-tier opinion poll score reflects. But still, big pets are being made by Dutch consumer products leader in the digitization of its supply chain in emerging markets.

“A key initiative is robotic process automation (RPA) supporting the order-to-cash process run from its regional service control towers,” says Aronow. “It’s more than 20 ‘bots’ have already automated hundreds of processes, with a roadmap for hundreds more in running operations in emerging markets.

What now for BRICS?

As a consequence, leading forwarders, third-party logistics providers and freight integrators have been keen on using predictive analytics to forecast demand in those regions and elsewhere in the emerging marketplace.

Talking about the growth trends in all of the world’s hot spots, The Kuehne+ Nagel Group has introduced the “gKNi World Trade Indicator”. This indicator that is the group’s data company which is powered by Loglnex suggests that the two largest economies in the world are experiencing a coinciding development of their trade balances. Strengthening of the trade balance in May and June is being shown by China. By contrast, the U.S. trade deficit is likely to widen further, after a surprising counter trend in March.

According to Joao Monterio, managing director of LogIndex and global head of new business at Kuehne+ Nagel stated that Cross-border trade seems to be returning to normal year-on-year growth after 12 months of robust growth. “However momentum has been decreasing and the second quarter could be heading towards the negative territory.”

Talking about the regional developments, It is viewed that China dominates the view on emerging Markets with good imports and exports. “Six economies signal a positive momentum, while eleven countries in the sample are trending downward. China, India, South Korea, and Brazil expanded its foreign trade activities by 13.6% to 22.8%.”

Promising start

It has been noted by Agility Global Integrated Logistics that is based in Kuwait that emerging markets growth prospects appear as it is more- promising in these years as a result of the introduction of digitized supply chain management solutions.

It has been surveyed by the company for more than 500 logistics managers indicates that nearly two-thirds agree with the International Monetary Fund’s 2018 emerging markets forecast of 4.8% to 4.9% GDP growth. If this proves successful it would mark the fastest expansion for emerging markets since 2013 and a second consecutive year of higher growth for developing economies, which have slowed dramatically since a 7.4% GDP gain in 2010.

It has been stated by Essa AI-Saleh, Agility’s CEO that it is refreshing that various small and medium-sized business has been seen by the industry as the ones getting the most out of emerging markets growth. Edwards, CEO of Ship Freight viewed this echo- the company’s subsidiary aimed at helping SMEs increase their participation in international trade.

“The key enabler for this growth is technology,” says Edwards. “Nearly 90 percent of our respondents believe that technology is leveling the playing field for them to operate globally,”

Agility stated that other nations moved up in rankings by improving their infrastructure and transport connections which includes India, Indonesia, Turkey, Egypt, Iran, Pakistan, Argentina, and Bangladesh. Meanwhile, those who failed to improve in this regard were Kazakhstan, Sri Lanka, Colombia, Brazil, Thailand, and Kuwait. Researchers also note that in Sub-Saharan Africa, infrastructure, links between economic centers and poor connectivity are deepening concerns for the logistics industry.

It has been observed by the Manner-Bell that in Vietnam, Indonesia, Philippines, and Malaysia suppliers feel the impact as well as companies in China where these components are ultimately assembled before being shipped across the Pacific. “Integrated and complex intra-regional supply chain networks have developed and, in value-adding terms, China may only account for a small proportion of the end product.

It should be taken into consideration that many U.S suppliers feed into these networks and will continuously be affected by the tariffs. If you need any assistance in outsourcing, you can take help from Global sourcing companies. They can assist you in all your queries related to sourcing and procurement.