HONG KONG: Asian retailers considering expansion beyond their home markets are focused on their own region, seeing the greatest potential in China and Vietnam according to a new report.
CBRE, the commercial real estate group, carried out a worldwide survey for its study How Active Are Retailers Globally? and found that for those within Asia Pacific the top ten target destinations were all local
Mainland China led the way, being a target for 58% of Asia Pacific-based retailers surveyed (Hong Kong was just under 30%), followed by Vietnam (48%), Malaysia (42%), Indonesia (39%) and Singapore (35%).
The remaining countries in the top ten – Thailand, the Philippines, Australia, Myanmar and Laos – all registered between 20% and 30%.
Sebastian Skiff, executive director of CBRE retail, suggested that there was a cautious attitude to expanding outside core markets, but pointed to some trailblazers looking at the global market.
"For example, [there is] Chinese brand Bosideng opening on Oxford St in London and a number of other Chinese brands are looking to launch in New York and Australia," he said.
Even among those looking to grow abroad, however, the air of caution was evident: 29% of those surveyed were planning to open less than five new stores in 2014, while a further 26% were aiming for between five and ten stores.
Retailers tended to limit their locations to top tier cities where quality retail space was accessible, said Skiff. But this was not necessarily just about selling through those stores.
He noted that Chinese consumers constituted an important clientele for many luxury retailers and could just as easily be buying in London, Paris or New York. "Having a strong presence in China is an important strategy to drive sales across a brand's global locations, not just within China itself," he stated.
In other regional markets, Vietnam was proving attractive as middle class consumer income and aspirations were both rising.
And in Malaysia, new retail space was being built which was expected to lead to lower rents and so provide an extra incentive for international retailers looking to expand there.
Indonesia, meanwhile, had been boosted by international brands such as Uniqlo and H&M opening outlets there.
Data sourced from CBRE; additional content by Warc staff