Retailers expect emerging markets such as India, the Ukraine and Russia to provide their main source of growth over the next five years.
40% of retailers expect to see growth in emerging markets whilst a quarter think that growth will come from their home markets, according to research conducted by CB Richard Ellis and revealed at the World Retail Congress in Barcelona today.
Peter Gold, EMEA head of cross border retail at CB Richard Ellis, said: ‘Rising interest and growing expansion into emerging markets globally is being fuelled by rapid growth in consumer spending and the "emerging middle class" in many of these countries.’
India was the most sought after emerging market, with 27% of international retailers surveyed saying they had either opened their first store in the region in the last year or were planning to do so imminently. The market is considered particularly attractive because there is huge demand and a low presence of international retailers.
The Ukraine and Russia are the second and third most popular markets. The survey said this indicated the trend for retailers to open in a primary emerging destination – such as Russia – and then move to smaller neighbouring countries as natural extensions to their store networks. Another example of this is retailers who first entered Singapore now moving into Malaysia, which is the fourth most popular emerging market.
Gold said: ‘We believe India will maintain its position as a popular new location for retail expansion as further trade restrictions are lifted. And, in the same way that Ukraine is now benefiting from retailer interest in Russia, retailers will again be looking to expand to adjacent markets around other emerging destinations.’
The retailers also said that the availability of real estate was their primary concern when entering new markets.
The Global Emerging Markets Survey quizzed 300 retailers worldwide, with a portfolio of 25,000 stores between them.
The top ten most active emerging retail markets are:
6) South Africa