Emerging Retail Markets: Chile and China Tops for Expansion

Chile is the top destination for emerging market retail expansion, followed by China, where retail sales totaled a whopping $3.7 trillion in 2013, according to the 2014 A.T. Kearney Global Retail Development Index.

With Uruguay, Brazil, Peru, Panama, Colombia, Costa Rica and Mexico also in the index of top emerging economies ready for retail expansion, Latin America continues to show strength as a regional retail growth market. Sub-Saharan Africa is also expanding into another exciting regional retail opportunity, the study found.

Although there were some notable retail contractions in the past year — Wal-Mart pruned its portfolio in China and Brazil, and Tesco took a more cautious approach to China — most global retailers are continuing their push into developing markets.

“Global retailers have learned from past mistakes and have become much more adept and successful with their emerging market expansion strategies. E-commerce is also helping with global expansion as retailers are able to test a market and build their brand through e-commerce before they expand with brick-and-mortar stores,” said Hana Ben-Shabat, A.T. Kearney partner and co-author of the GRDI, which ranks the top 30 developing countries for retail investment worldwide.

The Index analyzes 25 macroeconomic and retail-specific variables that help retailers devise successful global strategies to identify emerging market investment opportunities.

Highlights of the study include:

•  Latin America: Latin America keeps its dominating position in the GRDI, with three countries in the top five positions, as an expanding middle class offers lucrative opportunities.

The diverse retail ecosystem includes Brazil’s (#5) huge market; Chile’s (#1) sophisticated mid-sized market; and “small gems,” such as Uruguay (#3), where high consumption levels are attractive to luxury brands.

•  Asia: The region saw several improvements in the rankings, led by China (#2), which rebounded into second place. Even with less-bullish economic growth, China remains impossible for retailers to ignore. Retail sales in the world’s most populous country increased 13% in 2013 (to $3.7 trillion), and consumer confidence rose.

The top 10 emerging markets in the Kantar survey are:

  1. Chile

  2. China

  3. Uruguay

  4. UAE

  5. Brazil

  6. Armenia    

  7. Georgia

  8. Kuwait

  9. Malaysia

  10. Kazakhstan

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