New Report Listing the Top 10 Emerging Markets
WWD released a report ranking the countries most viable for retail expansion. A.T. Kearney, from the Global Retail Development Index, conducted the report using 25 variables.
The U.S. economy has been growing at a very slow pace and Europe has it's own debt problems. China and India have been growing at a rapid pace and other markets are modernizing, trying to secure a spot in the retail world.
Here’s a look at this year’s top 10 new markets provided by WWD. The list includes some selective perspective from the consultancy, the CIA World Factbook, The World Bank and WWD.
Retail sales per capita: $5,514
Economic note: Brazil has the world’s seventh-largest economy, which is driven by its agricultural, mining, manufacturing and service sectors.
Retail note: São Paulo’s JK Iguatemi mall drew 70,000 people on its first weekend in June and has 189 stores, including 30 international brands new to the country, such as Van Cleef & Arpels, Lanvin, Miu Miu and Topshop. And RioMar, a mixed-use shopping, office and entertainment complex in the Northeast region, opened last month with more than a million square feet dedicated to retail and food.
Obstacles: Low inflation and consistent growth has helped put poverty on the decline in Brazil, but inequality continues to be a fact of life in the middle-income country, with some lacking access to infant and secondary education. Tariffs on goods coming into the country are subject to significant, seemingly irrational swings, ranging from zero to 35 percent, making for an uncertain environment for exporters.
Retail sales per capita: $4,388
Economic note: Chile has 59 trade deals with other countries, including a free-trade agreement with the U.S., which took effect in 2004. The copper business funds one-third of the government.
Retail note: Gap’s first step in South America was Chile. Wal-Mart, Longines and Façonnable also have outposts.
Obstacles: Chile struggles with poverty and inequality. The unemployment rate stands at a relatively low 6.5 percent, but observers say the country’s poor need substantial help finding decent jobs to break out of poverty.
Retail sales per capita: $1,464
Economic note: Growth has slowed in the world’s second-largest economy, which still has to employ tens of millions of migrants and cope with environmental damage. Production for fashion and other industries is moving from the coastal areas inland.
Retail note: Consumers have become more price-sensitive and not as dedicated to particular brands as shoppers elsewhere. China is one of the world’s hottest markets for luxury goods, with $12 billion in sales.
Obstacles: Population controls have made China one of the most rapidly aging countries in the world. And the country’s small and insular group of political elite are walking a tightrope as increased contact with the world broadens the outlook of the Chinese people. The popular bashing of public officials in designer duds, as well as government restrictions on the advertising of luxury goods, show the country’s mixed emotions toward the new wealthy class.
Retail sales per capita: $6,189
Economic note: The country has a strong agricultural sector, an educated workforce, a high rate of urbanization and a high level of social spending.
Retail note: The retail industry is still diffused with domestic players such as Disco, Ta-Ta,
Mimatec and Uruforus in growth mode.
Obstacles: Uruguay continues to have relatively high debt levels and is particularly reliant on Brazil as an export market.
Retail sales per capita: $711
Economic note: Just more than 50 percent of India’s workers are involved in agriculture, but more than half of the country’s economic output comes from the service sector.
Retail note: The Indian retail market is expected to grow up to 20 percent over the next five years, fueled by increasing GDP, incomes and urbanization. Retail rents on Bangalore’s prime Brigade Road rose 18.1 percent this year to $88.46 a square foot. The country is starting to open up to outside retailers, but foreign ownership in the sector continues to be a hot-button political issue. Tommy Hilfiger has developed a major presence in the country with a partner. And LVMH Moët Hennessy Louis Vuitton has linked up with Genesis Luxury Fashion in the market.
Obstacles: India’s roads, railways and other underdeveloped infrastructure are starting to creak under the country’s dramatic growth. Worries of a housing bubble also loom over the economy.
Retail sales per capita: $1,816
Economic note: Georgia produces everything from grapes and hazelnuts to manganese and gold, but it imports almost all of its natural gas and oil.
Retail note: Georgia’s young urbanites are a boon to modern food and apparel retailing. Mango, Sisley, Benetton and Mexx have already set up shop in the country.
Obstacles: Georgia’s August 2008 armed conflict with Russia displaced thousands of people, who still need help in the areas of housing and employment.
7 United Arab Emirates
Retail sales per capita: $9,115
Economic note: A quarter of the United Arab Emirates’ GDP is based on gas and oil, which was discovered in the country more than 30 years ago.
Retail note: Dubai, one of the seven emirates, was hit hard during the global financial crisis, but remains a retail force. Dubai Mall, home to Calvin Klein Collection, Dior, Fendi and H&M, logged more than 54 million visitors last year, a 15 percent increase.
Obstacles: Inflation and the country’s heavy reliance on oil as the base of its economy present challenges for the years ahead.
Retail sales per capita: $3,699
Economic note: Oman is trying to diversify its economy to cope with waning oil supplies.
Retail note: Souks, or open-air markets, are being replaced with modern retailers. Marks & Spencer, LVMH Moët Hennessy Louis Vuitton and L’Occitane have been in Oman for half a decade.
Obstacles: Oman is growing, but with just 3.1 million people, it could struggle for the retail spotlight.
Retail sales per capita: $794
Economic note: The rapid growth of the mining sector—in everything from copper and gold to
uranium and tin—is remaking Mongolia’s traditionally herding- and agriculture-based economy.
Retail note: LVMH was the first luxury brand to enter Mongolia, setting up shop there in 2009. Zegna, Hugo Boss, Cartier, L’Occitane and Dunhill also have toeholds in the market.
Obstacles: Mongolia has to find a way to transition to sustainable growth beyond mining.
Retail sales per capita: $2,180
Economic note: Peru’s economy has averaged growth of 6.4 percent since 2002, but the mineral and metals export business and food imports leave the country subject to global price changes.
Retail note: Lima, the largest city, has little space for shops aimed at middle- and upper-income shoppers, but growth outside the city presses on. Zara had already touched down in the country and Gap plans to next year.
Obstacles: Peru has grown fast, but benefits have not reached everyone, particularly in rural areas.