Global Niche Market Leaders in Emerging Asia and the Necessity to Become Market Insiders

Abstract

In the present article we focus on the implications that the Emerging Asia growth trend implies for medium-sized companies from Germany that are market leaders or a top 3 supplier in their respective niche or market segment (aka ‘Global Niche Market Leaders’). We find that only a small portion of the companies considered have developed insidership on the Asian continent in general and in China in particular. We contend that this can put a mortgage on the strength of their global market position in the mid-term. We argue that it is recommendable to adopt a more assertive approach towards the Asian/Chinese market, implying a stronger emphasis on other foreign entry modes than export and a redoubling of R&D assets between -in this case- a German Standort and an Asian one. Similarly, we conclude that succeeding in Asia is becoming less and less a question of following a trickling up strategy (positioning oneself first in lower-end market segments and moving up gradually) as the continent is acquiring a lead market status for several high-tech industries.

Keywords: market insidership, Hidden Champions, emerging Asia, regional headquarters

JEL Classification: F23, D21, L21