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New Mega Trends : Rise of the DragonMacro to Micro Implications of Mega Trends in China on Future Business, Cultures and P...
Today’s Presenters     Sarwant Singh     Partner     Frost & Sullivan     Archana Amarnath     Program Manager     Frost &...
AgendaIntroduction and Definition of Mega TrendsPresentation of Top Mega Trends of the FutureKey Strategic ConclusionsMacr...
Top Mega Trends Covered in the Research                              Urbanization                    Future               ...
Mega Trend 1:Urbanisation - “City  as a Customer”
6
China to have 13 Mega Cities That Will Contribute $6.24 Trillion to                         the Total GDP in 2025    By 20...
China to Have 6 Mega Corridors and 3 Transportation Corridors in                              2025                        ...
Cities, and Not Countries, Will Drive Wealth Creation In the FutureCities like Seoul account for 50% of thecountry’s GDP; ...
Mega Trend 2:            2:Smart is the New    Green
Smart Factory of the Future in ChinaAugmented Reality                   Robotics            Virtual Planning andEg. Canon’...
Mega Trend 3:Social Trends
Personal                  Surge in                              Robots                  Asian Work                        ...
Aging China: China to Have 315 Million People Aged Over 60 by 2025             The Aging Population will Boost Healthcare,...
Middle Bulge: Around 949 Million Middle Class Individuals to         Account for 68% of Total China’s Population in 2020  ...
Six Degrees Apart: Social Networking Users to Reach 488                             Million in China by 2015           Aro...
Mega Trend 4:Connectivity & Convergence
80 Billion Connected DevicesBy 2020 10 Connected Devices for Every Household by 2020 5 connected devices for every user by...
China to Launch 211 Satellites before 2017                                     China to See it’s Own Space Station by 2020...
Augmented RealityAugmented Reality (AR) is defined as a real-time augmented view of the environment through digital datath...
Augmented Reality Impacting Different Personal Experiences                                                  Source: Frost ...
Yihaodian Plans 1000 Augmented Reality Stores in China                         “Unlimited Yihaodian” stores (1,200        ...
Mega Trend 5:Bricks and Clicks
China Retail Sales to Account over 1/3 of the World in 2025 China is to Surpass US to be the Largest Retail Market before ...
The Retail Model Will Evolve From a Single/Multiple Channel Model to an                    Integrated Cross Channel Model ...
Mega Trend 6:Economic Trends
China’s GDP To Reach $38 Trillion by 2025 Making It The                              Largest Economy in the World         ...
(Optimistic Scenario)                        29
Mega Trend 7:Future Infrastructure    Development
China Infrastructure Spending to Grow to $2.7 Trillion (2011-2015)                                                       (...
High Speed Rail to See the Largest Expansion in China    China to Invest $553.5 Billion to Extend the High Speed Rail Netw...
Mega Trend 8:Top Industries of  The Future
Top Industries in China in 2025                                 Retail                       Construction                 ...
So what will the future look like in 20251. Every 1 in 3 homes in China will have a personal robot.2. Digital Assistants w...
From Macro to Micro: Taking Mega Trends from Information to                    Strategy Implementation                    ...
Learn More About “New Mega Trends”         Upcoming Book:         New Mega Trends         Implications for our Future Live...
Frost & Sullivan’s Visionary Innovation SubscriptionProvides Global Mega Trends Analysis, Regional Implications and a Deep...
Contact InformationSarwant Singh                                       Archana AmarnathPartner & Practice Director, Vision...
New Mega Trends: Rise of the Dragon- Macro to Micro Implications of Mega Trends in China on Future Business Cultures and P...
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New Mega Trends: Rise of the Dragon- Macro to Micro Implications of Mega Trends in China on Future Business Cultures and Personal Lives

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Transcript of "New Mega Trends: Rise of the Dragon- Macro to Micro Implications of Mega Trends in China on Future Business Cultures and Personal Lives"

  1. 1. New Mega Trends : Rise of the DragonMacro to Micro Implications of Mega Trends in China on Future Business, Cultures and Personal Lives
  2. 2. Today’s Presenters Sarwant Singh Partner Frost & Sullivan Archana Amarnath Program Manager Frost & Sullivan Chao- Marcia Chao-Mei Chiu Research Analyst Frost & Sullivan 2
  3. 3. AgendaIntroduction and Definition of Mega TrendsPresentation of Top Mega Trends of the FutureKey Strategic ConclusionsMacro to Micro : How To Apply Mega Trends Within YourOrganisation to Develop Growth Strategies 3
  4. 4. Top Mega Trends Covered in the Research Urbanization Future Bricks andWhat is a Mega Trend? – City as a Customer Clicks Infrastructure Development Mega trends are Health, transformative, global Smart is the Innovating to Wellness and New Green Zero forces that define the Well Beingfuture world with their far reaching impact on New Business Future of business, societies, Social Trends Models: Value Mobility for Many economies, cultures and lives. personal lives Connectivity Beyond BRIC: and The Next Convergence Game Changers 4
  5. 5. Mega Trend 1:Urbanisation - “City as a Customer”
  6. 6. 6
  7. 7. China to have 13 Mega Cities That Will Contribute $6.24 Trillion to the Total GDP in 2025 By 2025, 921 Million people (65.4% of China’s Population) will Live in Cities (equals to 2.6 times of Mega cities in 2025 U.S. Total Population) Emerging mega cities in 2025 (4-8 million population) Haerbin, 8.2 Ulumuqi Beijing, 22.6 Changchun Tianjin, 11.9 Shenyang Dalian Shijiazhuang Tiayuan Qingdao Wuhan, 12.7 Jinan Zhengzhou Nanjing, 8.5 Xi’an Chengdu, 10.0 Suzhou Wuxi Shanghai, 28.4 No. of Urbanization % in Country Hefei Province Rate Urban Chongqing ,13.6 Population Changsha Ningbo 3 >80% 6.9 % Wenzhou Hangzhou, 8.5 5 70 – 79 % 28.3% Kunming Dongguan Guangzhou ,15.5 7 60 - 69% 26.4% Xiamen Shantou 14 50 - 59% 36.3% Shenzhen,15.6 2 < 50 % 2.1% Zhongshan Hong Kong, 8.2 Foshan, 9.8Note: Mega City is defined as a city with population of over 8 million and GDP Source: Department of Economics and Social Affairs, United Nations; Internationalof $250 billion or more. The figures represent population in Million Institute of Applied System Analysis; Frost & Sullivan 7
  8. 8. China to Have 6 Mega Corridors and 3 Transportation Corridors in 2025 Beijing-Harbin & Dalian Jiaozhou-Shijiazhuang (20) (48) Xuzhou-Lanzhou (20) Beijing-Shanghai (94) Beijing-Guangzhou (109) Shanghai-Chengdu (122) Mega Corridor: Mega Transportation Corridor: Shanghai-Kunming (97) Ningbo-Shenzhen (78)Note: The figures in brackets represent population in Guangzhou-Shenzhen-Million Hong Kong (39)Mega Corridors are corridors that connect two major citiesor Mega Regions (60 km or more apart, and with acombined population of 25 million or more). The corridorscan be planned economic corridors (with plannedinvestment in transport infrastructure, industrial zones,energy, or real-estate) or naturally evolving urban corridorsTransportation Corridors are those corridors that connectMega Cities or Mega Regions by transport links eg.Highways, rail, etc Source: National Development and Reform Commission of China; Population Division, United Nations; Frost & Sullivan. 8
  9. 9. Cities, and Not Countries, Will Drive Wealth Creation In the FutureCities like Seoul account for 50% of thecountry’s GDP; Budapest (Hungary) andBrussels (Belgium) each for roughly 45%.What are the Micro Implications?High Economic PowerHub and Spoke Business ModelTransit oriented developmentNew Mobility SolutionsCity as a Customer 9
  10. 10. Mega Trend 2: 2:Smart is the New Green
  11. 11. Smart Factory of the Future in ChinaAugmented Reality Robotics Virtual Planning andEg. Canon’s MR systems in Manufacturing Simulation Japan 3D Printing Location-Based- Location-Based- Cloud Computing Services in Warehouse 12
  12. 12. Mega Trend 3:Social Trends
  13. 13. Personal Surge in Robots Asian Work Pool Geo Gen YSocialization Hukou System Middle Reform and Bulge One- One-Child Policy “She- “She- conomy” conomy” Ageing Reverse Population Brain Drain 14
  14. 14. Aging China: China to Have 315 Million People Aged Over 60 by 2025 The Aging Population will Boost Healthcare, Leisure and Insurance Industries Micro Opportunities Population Pyramid, (China), 2012 and 2025 Pharmaceuticals & Health (million people) Supplement Healthcare 2012 2025 Aged Care 202.9 60+ 308.2 Retirement E-Health 271.0 45- 45-59 314.5 Senior Tourism 325.2 30- 30-44 313.5 Leisure 328.1 15- 15-29 252.9 Senior Social Service 254.9 0-14 214.9 Elderly Education Life Insurance Products Assisted Living (e.g. Robots)Note: The Population Pyramid is based on the assumption of China Source: Ministry of Civil Affairs, PRC; National Population and Family Planningcontinuing its current birth control policies. Commission, PRC; Population Division, United Nation; 15
  15. 15. Middle Bulge: Around 949 Million Middle Class Individuals to Account for 68% of Total China’s Population in 2020 2010 2020 1,348.9 million 1396.2 millionHousehold Disposal Individuals IndividualsIncomePer Annum 0.1% 0.2% (1.5) Rich (3)$100,000 0.4% 0.6% (4.9) Affluent (8.4)$60,000 7% Upper-Middle Upper- 10.3% (91.7) (144.0) Class$22,000 14% 43.0% (189.4) Middle Class (600.0)$10,000 7% 14.7% Lower Middle Class (99.5) (205.0) $7,500 64% 29.7% $1,000 (861.2) Poor (414.5)Poverty Line 7% Below Poverty 1.5% (100.8) (21.4) LineNote: Note: Figures in the brackets are millions of individuals. The averagehousehold size in China is approximately 3. Percentage numbers do not add up to100% because of rounding. Disposal Income = actual income that can be used for Source: Statistic Bureau of China, 2010; Euromonitor;final consumption, non-compulsory expenditure and savings Population Division, United Nations; Frost & Sullivan 16
  16. 16. Six Degrees Apart: Social Networking Users to Reach 488 Million in China by 2015 Around 70% of Chinese Netizens will be Involved in Social Networking Services 2011 Users of Top Social Networking Services, (China), 2015 2011 and 2015 Total: 1,355.2 million Total: 1,377.8million Non- Non-Internet Users 1 2 Non- Non-Internet Users Social Network Sites Micro- Micro-blogs 841.9 million 676.8 million 364.5 Internet Users Internet Users 350.5 244.2 249.9 million 701 million million 513.4 million million million 2011 2015 2011 2015 Non Social 213 Networking million 3 4 Users Non Social Media Sharing Social- Social-gaming 194.68 Networking million Users 455.7 427.6 million 324.28 million Social 488 325.31 million Networking 318.8 Social million Users million million Networking Users 2011 2015 2011 2015Note: the predictions of user number are based on current growth and marketshare Source: World Bank 2011; China Internet Network Information Center, PRC; Frost & Sullivan 17
  17. 17. Mega Trend 4:Connectivity & Convergence
  18. 18. 80 Billion Connected DevicesBy 2020 10 Connected Devices for Every Household by 2020 5 connected devices for every user by 2020 5 billion internet users by 2020 500 devices with unique digital IDs (Internet of things) per square kilometre by 2020Source: Frost & Sullivan, 2012 19
  19. 19. China to Launch 211 Satellites before 2017 China to See it’s Own Space Station by 2020 China’s 1st Space Station 2020 Kuafu Project Solar act. observation Tiangong-2 &3 2003-12 2012-16 Shenzhou-9&10 2012 Chang’e Project Lunar exploration 100 Rockets 100 2003-23 Satellites Project 2011-16 Accumulated No. By 2011 By 2017 Communication Satellite 29 Navigation Satellite 14 Satellites Earth Observation Satellite 38 111 211 Science R&D Satellite 16 Probe Satellite 14 Space Missions 150* 250*Note: The numbers indicates successful launches Space Centers & Units 3 4Source: CNSA; China Great Wall Industry Corporation; Frost & Sullivan 20
  20. 20. Augmented RealityAugmented Reality (AR) is defined as a real-time augmented view of the environment through digital datathrough use of text, sound, graphics, video, and navigation systems that increases user’s interactivity with thelocal environment . This extends business and mobility options, social interactions and experiences which hasimplications on personal lives, businesses and even day-to-day activities. Augmented Reality Augmented Virtuality Virtual World Reality 21
  21. 21. Augmented Reality Impacting Different Personal Experiences Source: Frost & Sullivan, 2012 22
  22. 22. Yihaodian Plans 1000 Augmented Reality Stores in China “Unlimited Yihaodian” stores (1,200 square meters) use unused city spaces and stock around 1,000 items. 23
  23. 23. Mega Trend 5:Bricks and Clicks
  24. 24. China Retail Sales to Account over 1/3 of the World in 2025 China is to Surpass US to be the Largest Retail Market before 2020 Retail Sales Per Capita 2025 ($ thousand) $5.2 8,000 2020 7,000 $4.1 7.29 2015 National Retail Sales ($ trillion) 6,000 $2.8 5,000 2011 2018-2019: China to 2.8x surpass US, the later Market 4,000 $1.8 will have total retail Value sales of $4.9-5 trillion 2.54 2.81 3,000 2,000 1,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Retail Sales(Offline) Retail Sales(Online B2C) Note: Some numbers do not add up because of the rounding. Source: World Bank; Prudential Real Estate Investors; Economic IntelligenceNote: The market size includes only B2C sales and does not include Unit; McKinsey & Company; National Bureau of Statistics, PRCC2C 25
  25. 25. The Retail Model Will Evolve From a Single/Multiple Channel Model to an Integrated Cross Channel Model (pre- Bricks (pre-2000) (post- +Advent of Clicks (post-2000) Department Supermarkets Hypermarkets Online Mobile Payments Mobile Apps Stores The Future - Bricks and Clicks (2015 and Beyond) Virtual Stores Interactive Stores Hyper Online Markets Source: Frost & Sullivan Analysis 26
  26. 26. Mega Trend 6:Economic Trends
  27. 27. China’s GDP To Reach $38 Trillion by 2025 Making It The Largest Economy in the World 38.88 25.11 Largest economy 1 20.76 in the world 16.70 16.98 10.98 6.15 12.39 10.46 2.43 0.47 0.87 1.37 8.84 $ Trillion Nominal GDP Growth 1990 1995 2000 2005 2010 2015 2020 2025 Optimistic (12-14%) Frost & Sullivan (8-9%) Conservative (5-7%)Note: The value shown as GDP & Population People’s Republic of China, including Hong Source: International Monetary Fund; World Bank 2012; Prudential Real Estate Investors;Kong SAR & Macao SAR. GDP at Current Prices based on 2011 numbers. The Economist 2011; National Development & Reform Commission of China; Frost &Appreciation of the Renmibi currency and inflation are factored into the GDP forecast. Sullivan 28
  28. 28. (Optimistic Scenario) 29
  29. 29. Mega Trend 7:Future Infrastructure Development
  30. 30. China Infrastructure Spending to Grow to $2.7 Trillion (2011-2015) (2011- 2006- 2006-2010 2011- 2011-2015 1800 Infrastructure Investments (on fixed assets), (China), 2006-2015 2006- 1600 $2,739 billion 316.20 1400 2011-2015 (12th Five Year Plan) 2006-2010 (11th Five Year Plan) 252.96 $2,365 billion 1200 837.9 51.38 133.34 142.29 1000 553.3 147.16 110.67 49.94 111.61 800 117.52 553.35 600 474.3 697.88 400 747.2 697.9 253.0 316.2 474.30 200 360.7 110.7 142.3 360.71 51.4 117.5 111.6 147.2 133.3 0 49.9 Power Railway Roads Urban Public Water Air Telecomm Water supply Transport Transport Transport Conservation 837.93 747.16 Power Supply Railway Roads Urban Public Transport Water Transport Aviation Telecomm Water Conservation Note: all numbers in charts represent billion USD. RMB:USD=0.1581:1 as nominal value by 2012 Source: National Development and Reform Commission, PRC; National Bureau of Statistics, PRC; Ministry of Housing and Rural-Urban Development, PRC; Asian Logistics and Maritime Conference, 2011; KPMG, 2011; Ministry of Transport, PRC; Ministry of Railways, PRC; Credit Suisse; Frost & Sullivan, 2012 31
  31. 31. High Speed Rail to See the Largest Expansion in China China to Invest $553.5 Billion to Extend the High Speed Rail Network to 16,000 Km by 2020 (expected 25,000 Km in 2025) Shenyang Shijiazhuang Jinan Zhengzhou Lanzhou Nanjing Xian 300- 300-350 km/h Hangzhou Changsha Nanchang 200- 200-250 km/h Kunming 160- 160-200 km/h Emerging traffic hub in 2015-2020Source: National Development and Reform Commission of China; International Institute of UrbanDevelopment, Beijing; Ministry of Railway of China; Ministry of Railway of China; Frost & Sullivan, 2012 32
  32. 32. Mega Trend 8:Top Industries of The Future
  33. 33. Top Industries in China in 2025 Retail Construction Finance Becoming worlds’ largest worlds’ largest construction To Gain 40% of IPOs over by 2019 market since 2010 US & UK by 2020 Logistics Aviation Automotive Luxury Goods Becoming worlds’ largest To become world’s largest World’s largest car market Becoming world’s 2nd largest by 2016 after 2025 since 2009 by 2016 Photo Credits: DreamstimeNote: All industries have beenanalyzed in detail in the report 34
  34. 34. So what will the future look like in 20251. Every 1 in 3 homes in China will have a personal robot.2. Digital Assistants will guide our everyday lives3. Fortune 500 list will have 200 companies from China (72 in 2012)4. Around 70% of Chinese netizens will be involved in social networking services5. We will have multiple devices monitoring our well being and wonder and designer drugs will be common place6. China will be the top super power in terms of impact to trade and investment. 35
  35. 35. From Macro to Micro: Taking Mega Trends from Information to Strategy Implementation To Macro Micro Mega Trend Analysis of Opportunities andSelected trends that impact your business and markets Unmet Needs Sub Trend Impact on Future Product/ A sub-layer of trends that has a Technology wide ranging impact Impact to Your Industry Visualising the roadmap of these critical forces through scenario- building and macro economic forecasts 36
  36. 36. Learn More About “New Mega Trends” Upcoming Book: New Mega Trends Implications for our Future Lives By Sarwant Singh Publisher: Palgrave Macmillan http://www.palgrave.com/products/title.aspx?pid=5774 23 Join Our Mega Trend Group On Mega Trends: Strategic Planning and Innovation Based on Frost & Sullivan Research 37
  37. 37. Frost & Sullivan’s Visionary Innovation SubscriptionProvides Global Mega Trends Analysis, Regional Implications and a Deep Dive into Specific Topics by Industry Verticals A B C Global Mega Trends Regional Mega Trends Focus on Specific Mega Analysis and Implications Trends and Their Impact by Industry • Featuring global study updates • Analysis of global Mega Trends in annually and analysis of key key geographies such as • Focus on specific Topics e.g. the topics like Urbanisation, Smart is 1. Africa Impact of Connectivity and the New Green, Health, Wellness 2. India Convergence on Healthcare and Well Being 3. China Devices, Urban Logistics . 4. Latin America • There will be over 30 such topics • Identification of specific completed annually regional trends (e.g., beneficiation in Africa) 360 Degree Perspective of Global Mega Trends and Analysis of their Impact on Industries 38
  38. 38. Contact InformationSarwant Singh Archana AmarnathPartner & Practice Director, Visionary Innovation Program Manager, Visionary Innovation ResearchResearch Group and Automotive & Transportation Group (+44) 2079157843 (+44) 2079157893 sarwant.singh@frost.com aamarnath@frost.comDr. Neil Wang Marcia Chao-Mei ChiuPartner & Managing Director, China Research Analyst (+86) 2132098895 (+44) 2073438385 xwang@frost.com marcia.chiu@frost.com 39
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