Global Top 50 List: 1/10 Chinese Enterprises, Moutai New List
On July 8, OC&C Strategy Consultants released its insight report on the top 50 companies in the global fast-disappearing industry. The report shows that in 2018, the ranking of the top 50 fast-disappearing enterprises in the world remained unchanged, and there was no significant change in the ranking of enterprises and their rankings, and stability became the new normal.
Evergreen Nestle, P&G and Pepsi still occupy the top three seats on the list. Only five companies ranked more than three, British and American Tobacco (BAT) merged into the newly acquired Renault Company, ranking up 6; Chinese dairy company Erie and Mengniu ranked up 9 and 4, respectively; and because Americans were distant from Molson Coors Brewing beer products, their ranking fell 5. The decline was the largest. It is noteworthy that Guizhou Moutai (600519. SH), a Chinese liquor producer, beat the Brazilian Food Company to become the only new company on the list.
In addition, the overall profitability of the top 50 companies in the world continues to improve, reaching 18.2%, the highest level since 2002 when compared with the top 50 companies in the world.
On the one hand, the results of operating cost management that most of the above-mentioned enterprises only went to in the past few years have come out, which has promoted the increase of profits. In 2018, the top 50 fast-disappearing enterprises in the world continued to improve their cost efficiency, with total operating costs falling by 0.2% compared with 2017. The tobacco industry outperformed all other industries with a profit margin of 1.7%. This is due to the synergistic effect of previous mergers and acquisitions, and the operating cost has been reduced by 0.5%. The beer, spirits and food and beverage industries have grown in net profit margins due to lower operating costs, with Unilever, Coca-Cola, Billiton and Budweiser InBev among them.
On the other hand, from the high value-added categories, including some high-end mergers and acquisitions and other rapid growth, as well as consumer demand for high-end products.
It is worth noting that although the ranking of enterprises did not fluctuate significantly in 2018, the listing of Moutai Liquor Company in Guizhou highlighted a long-term trend, that is, the rise of Asian enterprises in the top 50 global fast-declining companies. In the 10 years from 2008 to 2018, the number of Listed Companies in China and Japan increased from 7 to 13, accounting for 15% of the total sales of the top 50 companies in the world. Chinese companies grew from zero to five, and sales grew faster than their Japanese counterparts. China's food and beverage industry grew almost twice as fast as its global counterparts.
Xu Jin's analysis has three main reasons: first, the rise of middle-class consumers in China's third and fourth-tier cities, which has been ignored by Western brands so far, thus giving local brands the first chance; second, Japanese and Chinese enterprises have invested a lot of money in product innovation, and expanded the geographical scope and sales. Channels; furthermore, these companies are expanding into emerging markets. He believes that these three factors will undoubtedly ensure that more Chinese companies will enter the top 50 in the next few years, but this situation is likely to be unstable.
"In 2018, the average profit margin of the top 50 Asian companies in the world was 14%, far below the global average of 18%. As domestic competition intensifies, profit margins are also facing increasing downward pressure. In 2018, most Asian giant’s profit margins showed negative growth. Xu Jin said that Moutai's entry into the list has some accidental factors, which also reflects the sustained outbreak of brand premium. Whether or not we can continue to be on the list or even go up, referring to other fast-disappearing international enterprises that have been on the list for a long time, depends on whether they can become a real international enterprise and move towards a broader market. "After all, China's market is very large. At present, the advantages of several listed Chinese enterprises still come from the local market."