Asian nations shine in Kearney's Global Retail Development Index

29 April 2024 Consultancy.asia 3 min. read
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Asia-Pacific nations are stronger than ever in Kearney’s latest global benchmark of retail powerhouses. It is not just the obvious powerhouses China and India – other smaller economies in APAC have also shown an ability to attract global investment and build strong retail growth.

Every two years, global management consulting firm Kearney issues the Global Retail Development Index (GRDI), a study of the top promising retail markets worldwide. The index looks at a variety of factors to take the temperature of the global retail landscape.

The latest edition of the GRDI paints a picture of a global retail market at a crossroads. It gives special attention to the APAC region for its remarkable dynamism as economies there have done well in adapting to a changing world.

Asian nations shine in Kearney's Global Retail Development Index

In particular, five APAC nations – India, China, Malaysia, Indonesia, and Bangladesh – secured positions among the top 15 global economies that Kearney says retailers should prioritize establishing a presence in.

“This year's GRDI reflects the diverse retail potential among emerging economies in Asia. From established powerhouses like China and India to rising stars such as Indonesia and Vietnam, each nation offers distinct opportunities and challenges for retail investment in the region,” said Siddharth Pathak, co-lead for Kearney Asia Pacific’s Consumer and Retail Practice.

“Success in this dynamic market hinges on retailers' ability to adapt, innovate, and strategically navigate a diverse set of retail landscapes.”

Powered by a vibrant retail sector driven by high incomes, increased consumer spending, rising urbanization, and an increasing use of digitalization in retail and supported by financial inclusion initiatives including instruments, India captured the number-one position in the index.

China’s innovative technology has helped the economic giant become attractive to retailers that value experiential retail concepts, with digitalized retail being a major driver of consumer spending. India, for its part, benefits from a huge working population, rapid urbanization, and some recent regulations that have worked to boost commerce and retail.

Southeast Asia, with its less-developed economies but huge populations, such as Indonesia, has benefited from a growing middle class. Other factors that have led to a favorable retail market include improvements in infrastructure and growing urbanization.

A growing middle class is also fostering a strong market in the Philippines and Cambodia, which have also benefited from government policy conducive to a stronger economy.

As for Bangladesh, a strong ready-made garment industry has done wonders to attract major international brands and contribute significantly to the local economy, though much of that garment industry is built on low wages and dangerous conditions, with harsh criticism coming after the collapse of a sweatshop in 2013 that killed 1,134 people.

The global retail sector is expected to show a strong increase in sales moving forward, according to Kearney. The global e-commerce sector is also projected to see more sales and is expected to have added $1.4 trillion from 2022 to 2027. A total of 64% of that number is anticipated to come from emerging markets.

Other major trends in retail for 2024 include: uncertainty in macrotrends, inflation having an effect on consumer behavior, e-commerce retail overtaking brick-and-mortar, the rise of e-payments, and AI and other innovative technology being used in experiential marketing.