Retail and consumer products in emerging markets reported a staggering growth of c. 350% since 2009.
Currently, 50% of the total global retail sales are derived from emerging markets.
Wealth drives consumption supported by modern organized retail and global brand awareness for branded products. As a result, international retailers are relying on emerging markets to fuel geographical growth and expansion. In addition, digital strategies are implemented in order to boost omni-channel revenue growth.
Brand entrants are focused on niches supported by social media and digital marketing campaigns
Stores for global retail giants are shrinking due to lack of customer visits (a 100% decline in visits since 2009)
Giants need to personalize and localize to succeed in international markets in an effort to streamline omni-channel presence
E-Commerce remains a key segment of double digit growth globally where its expected to achieve c. 15% y-o-y growth
Omni-channel strategies are set to transform the retail industry due to increasing internet penetration and constant change.
Digital brands like Billion Dollar Shave Club have capitalized via “out of the box” social media campaigns and guerilla advertising
Retailers need to adapt their store presence by including digital screens in line with mobile and desktop interfaces to which con sumers are connected.
Millennials and high income shoppers are drawn in interactive shops which include video displays, touch screens and personal ized fitting room among others.
USA is the #1 e-Commerce market fol lowed by China and UK – supported by their onli neretail infrastructure, increasing con sumer. confidence and discretionary spending
Traditional retailers (including Neiman Marcus) are adapt omni-channel oper ations by integrating merchandising, planning and marketing for off line and online stores.
Market entry strategies depend on the lifecycle of the local retail market. The chart below, developed by MPC using the general guidelines of A.T. Kearney classification, defines the retail market growth stages and appropriate mode of entries in terms of labor, investment type and economic and demographic constrains.
Means selling products through distributors or agents in a new country with a minimal investment requirement
Is a relatively sophisticated arrangement where a firm transfers the rights to the use of a product or service to another firm
Typical North American process used to rapidly gain market expansion is popular and suited for repeatable business models
Arrangement of two companies that agree to work together in a particular market, either geographic or product, and create a third company
The most costly of all market entry strategies. It involves buying a company that either has substantial market share, a direct competitor or is the only option to enter the market
Refers to a capital project in which one party provides capital and the other party provides the operating experience in a foreign market
MPC has developed a strategic retail growth matrix by analyzing and ranking GCC territories in terms of economic & sector growth and easiness of doing business. Based on preliminary analysis, MPC suggests the following segmentation:
Retail and consumer sector in the GCC region is estimated at c. USD 110 bn and expected to grow at a CAGR of 6% by 2020 Key categories such as footwear, electronics, beauty and personal care are expected to grow at double digit rates whilst e-Commerce ranks as #1 top performing sub sector with an expected 20% y-o-y growth rate by 2020 Continuous government investment in retail infrastructure along with young population and high disposable income are key drivers of sector growth in GCC. A.T. Kearney Global Development Retail Index ranked five of all six GCC countries in the top 30 most attractive retail geographies world wide with Qatar on the 4th position and UAE on the 7th position for 2015.