A majority of consumer products companies are so encouraged by their investment success in emerging markets that they plan to continue significant spending in those countries, according to a new KPMG International survey in which executives rank China, India and Brazil as the top expansion destinations because they turned a profit there in under five years.

According to the KPMG survey of consumer markets executives in six countries, 51 percent reported their companies turned a profit within five years of investing in China, while 23 percent reached that milestone within just two years. Of the survey respondents whose organizations invested in India, 54 percent said profitability came within five years, while Brazil, though ranked third as the emerging market of choice, had the most success, as 60 percent of ventures were profitable within five years, 37 percent of them within just two years.

"These country demographics offer a large source of consumers with many relatively young buyers, and, in the case of China and India, the world's largest populations, as well as growing middle classes and high GDP growth rates," said Rob Coble, of KPMG and a Transaction Services partner in KPMG's U.S. firm. "With these demographics and results, it is not surprising that 73 percent of the respondents said their companies planned to continue significant investments in these markets."

In addition, Coble pointed out that 84 percent of survey respondents said revenue growth was the primary driver behind their investment decisions, and 90 percent of them said that profitability was the key measure of success of their expansion strategies.

"It remains important for companies to understand that the investment process will not be a seamless one, and that planning, due diligence and ongoing control are critical to generating profitable growth, lowering costs and gaining market share and brand awareness," said Coble.

Yet, investing in emerging countries remains challenging, the survey found. Shareholder rights and accountability, management cultures and book-keeping standards were pointed to as the top three hurdles faced with an investment in an emerging market, the KPMG study found.

Additional Survey Findings:

* Seventy-three percent of survey respondents consider their competitors'
investments when making their own decisions to invest in an emerging
market.

* Forty-seven percent of investors have invested in an emerging market
through a joint venture, 42 percent via an acquisition, and 26 percent
via a majority acquisition.

* When looking to gain access to local consumers, 42 percent indicated
that they introduced their own global brand and 22 percent purchased a
local brand.

KPMG's survey was based on 77 telephone interviews conducted between November 2005 and February 2006 with executives from global consumer market companies with revenue over $500 million. Survey respondents included officers of global retail and consumer products companies throughout the United States, United Kingdom, Australia, France, Germany, and the Netherlands who are directly involved with mergers and acquisitions and investing in emerging markets.