Wondering in which emerging market to invest? Management consulting firm A.T. Kearney performs an annual study of ideal regions for global expansion, analysing results through its Global Retail Development Index, focusing especially on grocers and apparel retailers entering emerging markets.
The study has shown that timing is everything when a retailer choses to expand his business. “There is a window of opportunity of five to six years to enter in an emerging market, “senior manager at A.T. Kearney Fadi Farra tells WWD. Farra is also the author of the GRDI study. “If you miss that window, there’s a good chance you will not succeed.” The study also measures market saturation, market attractiveness and country risk.
India heads up the list with a GRDI score of 100. “It’s mainly because of the basics. It’s the second-largest population in the world, and the country did more than $300 billion in retail sales last year, $61 billion of which was apparel. Retail sales are expected to grow to $100 billion by 2010,” says Farra, adding, “Women are starting to enter into the workforce in India. They are starting to wear nicer clothing in the workplace, which increases spending incentive.”
Russia comes in hot on India’s heels at second, with upmarket retailers opening their doors there. According to Farra this is because the country is heavily populated “and it is an example of where consumers are shifting from foods to non-foods.” Furthermore, Russians have a very strong awareness of Western style.
The Ukraine stands at third place. Both Armani and Charriol, the fine jewellery and watch retailer, have opened stores in the capital of Kiev. In fourth place, China has a retail market of $628 billion retail market, which is growing more than 9 percent per year, according to the study. Slovenia occupies fifth place; with a GDP of $36,405 and a membership to the EU, the country has become an appealing destination. Other countries to make the list are Latvia, Croatia, Vietnam, Turkey, Slovakia, Chile, Thailand, Bulgaria, South Korea and Tunisia.