London: India tops the sales focus for major global corporations, followed closely by China, and a third of companies also see these two countries as the top markets for production, according to a study released on Friday.
A survey by accountants Ernst & Young found that 47% of high-performing global firms saw India as the most important market for sales while 44% named China. The importance of India and China remained the same regardless of where the firms were headquartered, the study found.
On a broader level, which included top-performing as well as less successful companies, India was seen as the top focus of 34% of firms and China was only just behind with 33%.
The other members of the BRIC group of the world’s biggest emerging economies were some way down, with Brazil the main focus for 19% of companies and Russia for 14%.
“It appears that the combination of high volume and rapid growth in the India and China markets lifts them outside the normal more regional focus,” Ernst & Young said.
“Brazil can be seen to continue to emerge, while Russia’s relative importance has declined,” said the study, noting Russia had fallen out of the top 10 for North American firms though it is in fifth place for Western European firms.
The study, conducted for Ernst & Young by the Economist Intelligence Unit (EIU), interviewed 400 top-level executives at leading international corporations in January and February 2011. It distinguished between top-performing and less successful companies on the basis of revenue and EBITDA growth.
Almost half the high-performance companies named economic growth forecasts as the main factor for sales and investment strategies while 40% identified demographic profiles.
India and China are the world’s fastest growing big economies and have over a billion people each.
The study found that the top markets for production for all respondents were China (30%) and India (28%), followed by Brazil and Mexico with 12% each. But among high performers, 43% preferred India followed by China which was favoured by 41%.
While 40% of best-performing European firms and two-thirds of Asian companies named India as their top investment destination, China topped the list in North America, picked by 41% of leading businesses.
India was named as the favoured production focus by far fewer of the less successful businesses across the continents.
“This suggests that a focus on India in certain markets contributes to growth,” the study added.
Russia got 13% of the votes of high-performing firms in Western Europe and 13% in North America. Brazil got 16% and 9% respectively.