Magazines Archives - 2008 April

In the much-awaited Asia-Pacific Retail Market Report, Euromonitor International* offers a snapshot of the retail scene in 14 Asia-Pacific economies in 2007 as well as a glimpse of how some of them will perform over the years leading up to 2012.

Retail sales in 2007 grew across countries in the Asia-Pacific region bar Australia and New Zealand, where the strong local currency resulted in negative growth posted in US-dollar terms.

China's retail industry exhibited the most dynamic performance among the Asia-Pacific markets, and was the only country with strong gains in excess of 10% over the preceding year. This was despite the fact that being valued at US$639 billion in 2007 placed the retail industry in China as the second largest in the region.

Clearly, the land of retail opportunities with its vast population is reaping the benefits of a booming economy as well as increased spending by local consumers aided by supportive government policies.

The competitive retail environment caused a flurry of activity on the mergers and acquisitions front in both developed and developing markets. In Australia, Wesfarmers’ bid to take over the Coles Group sent ripples across the retail industry. Japan also witnessed the birth of new companies
such as J Front Retailing through the marriage of Daimaru and Matsuzakaya. In China, leading durable goods player Gome Electrical Appliances Holdings Ltd acquired yet another competitor in 2007 in order to strengthen its position in cities such as Beijing.

2007 was a particularly exciting year for global fashion retailers, starting with the entrance of Swedish clothing & footwear retailer H&M in Hong Kong and China. Others which were quick to follow ranged from the likes of De Beers and Tiffany Jewellery to Gap and Banana Republic.

Oftentimes, these global retailers are faced with a saturated demand in their developed home markets. Also, the lure of China’s increasingly affluent consumers is hard to resist.

In the developing markets, especially China, India and, to a lesser extent, Indonesia, Thailand and Vietnam, there are emerging groups of young working professionals who are willing to spend. Coupled with the younger generation’s need for instant gratification, this has translated into immense opportunities for retailers, both home-grown and otherwise, to tap into.

The technology revolution continues to be manifested instrong growth for Internet retailing across the Asia-Pacific markets, be they developed or developing countries. The convenience offered by Internet retailing coupled with a boost in the payments infrastructure to assuage security concerns as well as an increasingly tech-savvy world population are providing the impetus fuelling Internet retailing’s popularity. That said, it is interesting to note that in most countries, it is the “clicks-and-mortar” model that is reigning supreme, suggesting that retail therapy at the shopping malls has yet to go into retirement.

Not surprisingly, the ever-trendy Japanese consumer has taken Internet retailing one step further
in the form of m-commerce. Armed with their mobile phones, consumers in Japan can literally shop wherever they are, whenever they want.