Warc Blog

Emerging market retailers head abroad

16 July 2013
LONDON: More emerging market retailers are expanding overseas and smaller store formats are increasingly popular, according to new research from Accenture.

The Accenture Globalization Index, compiled by the consultancy and PlanetRetail, identified a universe of 250 major grocery retailers and 239 major non-grocery retailers and tracked their entries in new territories.

Overall, there were 25 market entries in the first quarter of 2013, compared to 17 in the previous quarter.

One fifth of all market entries in the first three months of the year were made by retailers based in emerging markets, compared to 0% in the fourth quarter of 2012 and 12% in the third quarter of 2012.

"Globalization in retail is certainly not one-way traffic from developed to emerging markets," Julian Allen, global retail research lead at Accenture, told Luxury Daily. "These new entrants will make any market that they enter more competitive."

Over those three quarters, seven of the nine market entries by emerging market-based retailers were made into other emerging markets and just two into developed markets.

Examples of the former included BIM, the Turkish discount grocer, moving into Egypt and Steinhoff, a South African homewares retailer, moving into Turkey.

And the two instances of the latter included AgroTrade, the Russian supermarket, opening its first US store, while Central Retail Corp, a Thai retailer, entered Denmark via the acquisition route, buying up department store Illum.

Accenture expected this trend to continue, driven by saturation in retailers' home markets and their increased ability, in terms of capital and talent, to undertake such expansion.

Accenture also noted a reluctance to commit to investment in real estate, so retailers were testing the water in new territories by using smaller store formats and temporary, pop-up stores.

This also had the plus of helping build the brand while complementing an online presence, while being in tune with consumers' increasing desire for convenience, said the report.

Data sourced from Accenture, Luxury Daily; additional content by Warc staff

 
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