Source: Media Outreach
SINGAPORE – Media OutReach Newswire – 22 February 2024 – In a year that has witnessed a reshuffle of emerging market potentials, global consultancy Kearney’s 2023 Global Retail Development Index (GRDI) captures the core of a retail landscape at a crossroads. The report, a bi-yearly survey of the most promising retail markets worldwide, underscores the agility and dynamism of retail economies adapting to a reshaped world.
Asia Pacific (APAC) nations make a strong showing in global ranking
While the obvious candidates – China and India – continue to show an enduring appeal to global investors due to their market size and rapid consumer base growth, a host of other compelling opportunities emerge among their Asia Pacific neighbors. Across the region, APAC countries have displayed remarkable retail growth trajectories, with five APAC nations (India, China, Malaysia, Indonesia, and Bangladesh) securing positions among the top 15 economies for retailers to prioritize establishing a presence in, based on the GRDI.
In China, innovative technologies, experiential retail concepts and a highly digitized retail market continue to drive consumer spending. India’s retail sector thrives from a large working population, rapid urbanization, and government initiatives like Digital India, propelling e-commerce and modern retail formats.
Looking at emerging markets in Southeast Asia, Indonesia, for instance, benefits from a growing middle class, expanding infrastructure, and increasing urbanization, fostering a vibrant market for both traditional and modern retail players. Meanwhile, the Philippines and Cambodia demonstrate significant potential for catching up, fueled again by growing middle-class populations and urbanization, as well as favorable government policies attracting foreign investment.
Bangladesh, as another notable example of an emerging market experiencing high growth in the retail sector, has been propelled by its strong ready-made garment export industry, attracting major international brands and contributing significantly to its economic growth.
Overall, APAC nations serve as pillars of strength in the growing retail sector. The global retail e-commerce sector is projected to show a strong increase in sales, adding an absolute value of $1.4 trillion from 2022 to 2027. Of this growth, 64% is expected to come from emerging markets. APAC nations, in particular, are expected to lead the digital charge due to rapid growth anticipated in China, Indonesia, Malaysia, Vietnam, Thailand and India.
Six key trends emerge in this year’s GRDI
Globally, as retail growth extends beyond traditional powerhouses, the GRDI report identifies six pivotal trends shaping the retail landscape in emerging markets:
- Macroeconomic uncertainty remains high, with global economic recovery being gradual and varying across developing economies.
- Consumers are trading down to less expensive, local, and private label items due to inflationary pressure.
- eCommerce growth continues unabated, with expectations to grow at twice the rate of brick & mortar retail by 2027.
- Omnichannel strategies are becoming increasingly critical, with retailers in developing markets investing in omnichannel capabilities.
- The rise in e-payments and BNPL options is reshaping consumer behavior, with rapid adoption in the APAC and MEA regions.
- Retail AI and technological innovations are being leveraged to create new, experiential marketing approaches to attract and service consumers.
Siddharth Pathak, Asia Pacific Co-Lead, Consumer and Retail Practice, Kearney said:
“This year’s GRDI reflects the diverse retail potential among emerging economies in Asia. From established powerhouses like China and India to rising stars such as Indonesia and Vietnam, each nation offers distinct opportunities and challenges for retail investment in the region.”
“Success in this dynamic market hinges on retailers’ ability to adapt, innovate, and strategically navigate the diverse retail landscapes,” he added.
As global retail players strive to navigate a landscape marked by shifts in consumer behavior, technology adoption, and competitive activity, the 2023 GRDI provides an indispensable roadmap for developing sustainable strategic responses and forging winning value propositions.
Please find a link to the full report here: The 2023 Global Retail Development Index
Hashtag: #Kearney #GlobalRetailDevelopmentIndex #GRDI
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