Magazines Archives - 2010 July

Top retailers keep up sales growth despite challenging times
Story 3 - Retail Asia Top500 Overview

The seventh year of the Retail Asia-Pacific Top 500 sees a muted performance posted by the leading retailers in the region. In 2009, total value sales — in US-dollar terms — generated by the top 500 retailers in the Asia-Pacific grew by a mere 2%, considerably lacklustre relative to previous editions which generally bore witness to double-digit growth rates. Economies in the region saw consumers reigning in their spending as the recession played out over the course of 2009. Both the travel and retail industries also saw sales additionally curtailed as a result of the H1N1 flu pandemic in June 2009. Against this challenging context, it is heartening that the Asia- Pacific’s leading retailers still managed to keep sales growth on the up, reports Loo Geok Leng, Head of Research, Asia Pacific, Euromonitor International.

Market highlights
In 2009, the Top 500 retailers generated sales totalling US$720 billion (see Table 1). Exchange rates against the greenback continued to colour performances across the economies in the region. For example, retailers in South Korea, Australia and New Zealand stand out for dismal sales in 2009 in US-dollar terms. However, sales performance was considerably more positive in local currency terms.

China once again saw the biggest leap in representation in the Top 500 rankings in 2009, with an addition of 18 new entries over the previous year. Despite suffering a battering in 2009 as a result of the global economic crisis, which saw GDP for the country going down from originally double-digit projections to a more sedate 9%, China remained the fastest-growing economy in Asia in 2009 and is expected to be the same in 2010 as well. The top Chinese retailers in 2009 were Gome Electrical Appliances Holding Ltd (No.12) and Suning Appliance Chain Store (Group) Co Ltd (No.13).

Japan continued to lead in terms of the number of retailers that made it to the rankings, and actually saw an increase in representation in 2009, due in part to entries from Australia and New Zealand dropping out of the ranks. Despite an ailing domestic economy, the land of the rising sun remained a force to contend with in the Retail Asia-Pacific Top 500. In fact, with the exception of Australian Woolworths Ltd (No.6) and Wesfarmers Ltd (No.8), the top 10 retailers were Japanese. In 2009, Seven & I Holdings’ 7-Eleven in Japan continued to hold its ground as top dog. Aeon Group’s department store fascias inched the retailer back up to No.2, pushing close competitor Seven & I Holdings’ department store fascias down to third place once again.

Vietnamese retailers put in a strong showing in 2009. There were three new entries in the Top 500 ranking this year — Mobile World (No.446), Big C (No.469) and Parkson (No.488). Partly because of this increased presence of Vietnamese retailers in this year’s rankings, sales growth was also the highest relative to other economies in both US-dollar and local-currency terms in 2009. Retailing remains an attractive industry in Vietnam with significant room for development.

On 1 January 2009, the Vietnamese government officially opened up the retail industry to foreign companies, as part of its commitment upon ascension to the World Trade Organization. This effectively means that foreign players could operate in the country’s retail environment under 100% foreign-owned entities. While foreign retailers’ foray into the country has been somewhat muted as major investments are held back amid the economic downturn, local retailers seized the opportunity to boost their presence and capabilities in preparation for the foreign onslaught. Among the most active of these are Saigon Co-op, Hapro Mart and G7 which expanded outlet numbers across the country. Not to be left out of the expansion race are smaller retailers such as Vissan, Shop & Go and Fivimart.

2009 saw Indian retailers taking a backseat compared to previous years. The 26 entries in the Top 500 ranking accounted for US$6 billion of sales in 2009, representing a growth of less than 2% over 2008. The leading retailer continued to be Pantaloon Group (No.169) with its Big Bazaar hypermarket fascia. The global economic crisis and its impact on India resulted in a slowdown of the Indian economy in 2009, causing consumers to tighten their purses. The availability of financial support for retail expansion also dried up, putting a halt to the unprecedented expansion seen over the past five years. Lower consumer confidence resulting from the recession, as well as job losses, caused fewer visits to retail stores and the consequent plummeting of sales for major retailers.

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2010 July Stories:

Luxury goods are back in fashion - Part 2: Asia’s affluent fuel growth potential and outlook for Asian top-end retailing

NRA Show 2010 sees renewed growth as recession wanes

Top retailers keep up sales growth despite challenging times

Signs of recovery in the global retail sector

Visa card spend in Asia-Pacific crosses US$1-trillion milestone

India’s food retailing opens new opportunities to foreign players

China, Japan among top 10 retail destinations in Asia, says CBRE report

Japanese Rakuten embarks on global e-commerce expansion

3M’s new multi-touch display brings touch technology to new heights

JCube to launch in 2012

TNT revs up its Asian network operations

18th edition of FHT2010 ‘firmly scheduled’ to take place this September

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