When the U.S. sneezes, the world catches a cold. Not long ago, that axiom dominated debate on the global economy. But in recent years, the growing global influence of the European Union, the rise of China and India, along with the dollar’s weakness and the euro’s strength, have led some to suggest that the U.S. is no longer the center of the financial universe. We’re not quite ready to suggest that New York City is ready to cede its central position to London or Hong Kong, but it’s clear that what happens in other regions of the world certainly have an effect on U.S. businesses. That’s evident when you peruse The Top 50, our annual look at the leading U.S.-based players in the global household and personal products industry. Now, more than ever, multinationals such as Procter & Gamble, Colgate-Palmolive and Avon are relying on other areas of the world for growth.
Next month, the strength of corporations outside the U.S. will be on display when we publish The International Top 30, a report on the leading marketers with corporate headquarters outside the U.S. The International Top 30 details how European and Asian firms such as Unilever, L’Oréal and Kao are competing with U.S. companies to win the hearts and minds of consumers around the world. But no matter where they’re headquartered, multinationals, along with smaller, local players, find themselves competing with opponents all around a rapidly shrinking playing field—one where consumer preferences in say, Brazil, may not exactly match those of consumers in Baltimore. It all makes for an increasingly complex business landscape.
At the same time, products made halfway around the world can show up in a local retailer in a matter of days. That’s how diethylene glycol-laced toothpaste from China found its way to retail shelves in the U.S., Panama and Australia. China, in fact, is responsible for 60% of product recalls in the U.S., according to the Consumer Product Safety Commission.
Today’s global economy offers plenty of rewards—and risks—for those companies willing to venture beyond their national borders. But with the free-flow of consumer goods comes growing concerns about their efficacy and safety. And these concerns are enough to leave some company executives, regulators and consumers sick to their stomachs.