The battle for emerging market growth is turning into a cutthroat competition between established multinational companies and a new generation of rivals from the developing world.
According to a recent report from the Boston Consulting Group, this new generation, dubbed "global challengers," consists of 100 fast-growing and fast-globalizing companies from developing economies that are on the quest to become global leaders in their industries.
To stay in the race, western corporate giants will need to know when to compete and when to collaborate with the new guys on the block.
They are not "mere curiosities operating in distant regions," said the report entitled "Allies and Adversaries." "Global challengers are full-fledge competitors" that will "shape the global economy in the next decade."
Among them: Alibaba, the largest e-commerce company in China and Trina Solar, the world's fourth largest solar panel manufacturer; South Africa-based media giant Naspers, Chile's Latam Airlines, Russia's Lukoil and Gazprom, as well as India's carmaker Tata Motors and Infosys, a software solutions company. (Read More: Developed or Emerging Stocks—Who Will Win in 2013?)
"If ever there was a wake-up call for business leaders in the West, this is it," said David C. Michael, coauthor of the report, in a press release. "We have been monitoring the rise of global challenger companies for nearly a decade, and the ambition of these companies — what we call the accelerator mindset — has never been stronger."(Read More: China Stocks Overbought? Charts Suggest Correction)
The global challengers already outpace their competitors from the developed world in growth, job creation and productivity.
According to the report, their average revenue was $26.5 billion in 2011, compared with $21 billion for the S&P 500 nonfinancial companies.
In the past five years, global challengers added 1.4 million jobs, while employment at nonfinancial S&P 500 companies remained flat. Moreover, their average revenue per employee now exceeds that of nonfinancial S&P 500 companies.
While China and India dominate the list, with 30 and 20 companies respectively, the geography of global challengers is steadily broadening. It now includes firms from Egypt, Colombia, Qatar, Saudi Arabia and South Africa.
The span of industries is also widening. Although heavily concentrated in industrial-goods and commodities, the game-changers of emerging markets are rapidly taking on the financial services, healthcare equipment and electronic commerce sectors. (Read More: Gear Shift? Relax on Europe, Beware Emerging Markets)
"Challengers and established multinationals are increasingly chasing the same consumers and customers," said the report.
Some challengers like Mexico's conglomerate Alfa and the baker Grupo Bimbo are expanding into the home markets of multinationals.
But beyond the competition, there are abundant opportunities for cooperation and mutual benefit for both sides.
The advantage of the emerging market companies is no longer solely tied to lower costs. In fact, their cost advantage over competitors from mature markets is eroding, according to the report.
In response, many are increasingly focused on manufacturing higher quality products, harnessing their cash resources and investing in innovation.
In fact, annual research and development (R&D) spending by the global challengers more than tripled from 2007 through 2011.
Companies from China were granted more U.S. patents in 2011 than companies in Israel, Australia, Italy, Netherlands, Sweden and Switzerland. Mindray, China's largest medical equipment manufacturer generates more U.S. patents per revenue dollar than many global leaders.
The challengers also make for lucrative customers, as they buy more than $1.7 trillion of goods and services and invest more than $330 billion in capital spending a year.
The nature of partnerships that are slowly emerging is already evolving from mere access to resources, brands and transfer of technology to collaboration on new product development and technology exchange, said the report.
Thus, China National Chemical Corporation and the U.S.-based DuPont formed a 50-50 venture last year, and Indian pharmaceutical company Dr.Reddy's Laboratories has entered into a deal with Germany's Merck to jointly develop generic cancer treatments.
But future success of the global challengers is not guaranteed, noted The Boston Consulting Group. Just half of the companies selected in 2006 continue to make their cut in 2013.
Among the key challenges for the emerging market companies is building capabilities in talent management and brand building, as well as strengthening their skills in managing organizational complexities that come with being a global player.
-By CNBC's Karina Frayter; follow her on Twitter @KFrayter