China ranks as the most attractive emerging market for apparel retailers, according to global management consulting firm A.T. Kearney’s 2011 Global Retail Development Index for Apparel. The report advises that as U.S. consumer confidence and the overall economy continues an uneven recovery, the nation’s apparel retailers must look to high-growth emerging markets to expand their businesses and increase revenues.
“Emerging markets were impacted much less severely by the 2008 -- 2010 recession, and these markets are now proving their sustainable growth,” said Mike Moriarty, A.T. Kearney partner and co-leader of the study. “Apparel retailers must look to these markets as an important part of their strategy for growth.”
China’s first place standing is driven by the country’s large population and also by the growing disposable income of the middle class and the Chinese consumers’ developing fashion sense, according to A.T. Kearney. With its compound annual growth rate of more than 20% in recent years, apparel retail in China has grown at a rapid pace. The trend is expected to continue for the next five years.
“Retail formats in China are diversifying beyond traditional department stores. Chinese consumers are beginning to shop at venues such as hyper markets, specialty stores, outlets, discount stores and on line,” said Hana Ben-Shabat, a partner with A.T. Kearney and co-leader of the study. The United Arab Emirates holds the second position in the index, driven by a population with a high disposable income and immense fashion consciousness. The expatriate populace and tourism in particular are driving forces of consumption in this market.
Additionally, the UAE is a regional commerce center in the Middle East, and is a preferred market for entering the Middle East as well as testing new products and retail formats.
Kuwait is ranked number three, driven by its favorable long-term economic outlook, more women entering the workforce which creates a more sophisticated consumer base with high levels of disposable income and fashion awareness, and significant expansion in retail real estate. The gross leasable retail space in Kuwait has expanded from 345,000 sq. meters in 2006 to 1.15 million sq. meters in 2010 -- triple the space in four years.
Here is a list of the Top 10 emerging nations for apparel retailers:
- Saudi Arabia
For a full copy of the report, to grdi.atkearney.com.