Magazines Archives - 2008 July

Retail trends in Asia-Pacific
Story 9 - Market Info

An overview by KPMG’s regional Consumer Markets practice.

Japan, China and India are now firmly established as the three leading countries in the Asia-
Pacific for retail sales, overshadowing the next-largest markets in the region; South Korea,
Australia and Indonesia. While consumption seems unlikely to grow as strongly as it has over
the past five years, both China and India continue to remain attractive locations for foreign
investment. The expansion of urban areas, coupled with a growing middle class with more
disposable income, has resulted in a rise in domestic spending. In other countries, the steady
growth of double-income families and intensification of credit-card use have contributed to
retail-sector expansion.

Occupancy costs are continuing to rise. Prime retail rentals are on the rise in India and many other parts of Asia. Brand and quality are increasingly dictating consumer behaviour not only in Japan,
Singapore and Hong Kong, but also in the emerging market economies of India, Indonesia and China, despite their lower purchasing power parity. Retail sales are increasingly being driven by a youth culture, interested in technological advances and luxury western goods.

Foreign retail investment focus has been shifting from large- to small-format expansion, as key
players concentrate on developing strategies to consolidate their position in the region.

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