India overtakes China as the most promising market for retail expansion

on Jun5

Source: A.T. Kearney

Vietnam was number six on the list, moving ahead five spots from last year as the country boasts more liberal investment laws. Also in Asia, Malaysia and Indonesia placed third and eighth place, respectively, the report said.

Malaysia’s market will grow 23 percent annually through 2021, driven by its investments in electronics and media, A.T. Kearney has forecast.

Asia is the “driving force” behind global retail expansion this year, the retail report’s authors wrote. There have been notable expansions there in food and beverage, personal care products, apparel, fashion and luxury, they said.

“One might wonder why some other countries aren’t on [this year’s] index,” Ben-Shabat told CNBC in an interview.

The reason is simply high political risk.

“For an American retailer making the decision to go into a country, you want to know you’re operating safely,” she went on. “At least in the beginning, you’re sending your own people, employing local people. … Political stability of the country is key.”

Other areas worth noting mentioned in this year’s report: North Africa is making gains, and South America’s Andes markets are impressing investors, but Russia is facing more sluggish growth.

“Russia is still recovering from a recession, but there are some positive signs, including a luxury market boosted by Chinese tourists,” Ben-Shabat wrote. The country checked in at number 22 on this year’s list, unchanged from 2016.

In addition to ranking the countries that pose the best opportunities for retail investing, A.T. Kearney has predicted what will be a driver in sales over the next decade: mobile shopping. And especially in these emerging markets.

Annual spending and investments on mobile shopping in a survey of 10 large emerging markets are estimated to be $275 billion, the consulting firm found. In fact, Ben-Shabat and her co-author believe emerging markets are ahead of developed markets in terms of mobile shopping growth rates.

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