Euromonitor International releases the fifth edition of the Retail Asia-Pacific Top 500
Author: Mala Patel
Date published: 25 Jul 2008
Researched by Euromonitor International and published by Retail Asia magazine, the 2008 Retail Asia-Pacific Top 500 is an annual ranking of the region's retail businesses, based on retail turnover, in 14 major Asia Pacific markets.
Geok Leng Loo, Head of Research for Asia-Pacific at Euromonitor International, unveils key global and regional retailing trends for 2007, a strong year for APAC retailers despite challenges of the world economy.
Map of Retail Asia's top retailers 2007
A large wave of mergers and acquisitions combined with retailers' innovative strategies to attract the new aspirational and affluent Asian consumer helped alter the 2008 top 500 rankings. The leading 500 had total sales of US$637 billion in 2007, reflecting a growth of nearly 10% over last year's US$581billion, with India leading the way and Vietnam as a rising star.
The 2008 edition showed that retailers, grouped by country, fared better in 2007 than in 2006, with a total of 313 companies making the list hailing from Japan (120), China (89), Australia (66) and South Korea (38). These four economies accounted for close to 63% of the ranking and more than 88% of retail value sales generated by the leading 500 retailers in the region.
According to Euromonitor International's research, the real stars of the Top 500 ranking remain the emerging economies with retailers in China and India representing 22% of ranking entries. These regions saw their sales rise 26% and 63% respectively in 2007. Aside from their revving economic engines, burgeoning middle-class consumers and a change in consumer spending habits are bolstering retail performance in China and India. Growth also stems from local companies boosting their operations, both in response to and in anticipation of stronger competition arising from the easing of regulations surrounding the retail industry in China and India.
Top 500 retailers - 2007 US$ sales and growth by country
Key global and regional retailing trends for 2007
Mergers and acquisitions continue to colour the regional retail scene with a flurry of deals in 2007. Regardless of whether retailers were operating in a developed or developing economy, achieving growth via an inorganic route appeared to be a favoured strategy undertaken to better arm themselves in an increasingly competitive operating environment.
Global retailers have continued to make inroads in Asia, seeing strong potential for development in the region with changing attitudes towards money and shopping as well as rising disposable incomes. Euromonitor International found disposable income growth was particularly strong in emerging economies such as China and India with incomes rising 94% and 68% respectably between 2002 and 2007.
The changing attitudes towards money and shopping in the Asia Pacific region combined with status consciousness also translates into greater opportunities for luxury retailing. Retailers are aware of this and more than happy to respond to Asian consumers' loud call for branded goods.
Retailers in APAC have been using innovation as a preferred route to consumers' wallets. Innovation can come in various forms such as a simple refurbishment to enhance customers' shopping experience or introducing new concepts touching on health concerns, picking up on an issue close to consumers' hearts. Retailers' innovation has also focused on providing more services for consumers' convenience. For example, in Japan, online retailer Rakuten tied up with convenience store chain Family Mart to facilitate consumer pickup of their purchases from the latter's wide network of convenience stores.
Internet retailing has made its presence felt and has become a strong challenger to traditional retailers in Asia-Pacific. “Bricks-and-mortars” retailers are expected to evolve in order to remain competitive and relevant to the local shopper. Despite the advent of Internet retailing in the region, in most countries, retailers have shown an inclination towards having a “clicks-and-mortar” multi-channel model, suggesting that retail therapy at shopping malls will remain strong. According to Euromonitor International's latest research, Internet retailing was worth nearly US$39 billion for the 14 Asia Pacific countries in 2007 and is forecasted to double by 2012 reaching US$71 billion.
Retail landscape in the future
Despite the sense of uncertainty in 2008 in the global economy, retailers are pinning their hopes on Asia and remain upbeat about their prospects. Key issues retailers seeking success in the Asia Pacific region will need to focus on include:
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The burgeoning group of aspirational luxury goods-seeking Asian consumers |
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The spill over of bespoke offerings and solutions to Internet retailing |
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The rising need for glocalisation and the advent of green consumers |
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The increase in food prices and how this could favour the development of large grocery retailers over that of small, independent players |
Geok Leng Loo, Head of Asia-Pacific Research, Euromonitor International
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