China Ranks No. 1 in Top 10 Emerging Markets for Apparel Retailers
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.
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Promotional pace held steady in May
Some companies were more aggressive with promotions last months and others were less so, but Target held steady producing the same number of circular ad pages (109) in May 2011, and it did the same month the prior year, according to data collected by the Chicago based firm Market Track.
Conversely, in keeping with Walmart’s renewed emphasis on every day low prices, its average number of promotional pieces per market decreased to two in May compared with 2.8 the prior year, however the average number of pages increased to 40 compared with 30, according to the Chicago-based firm Market Track.
On average, across a retailer set that includes many of the nation’s top companies, both the number of inserts and number of page counts decreased when comparing May 2011 to May 2010. Notable standouts for the insert counts include a decline of 39% for Home Depot and an 11% decrease for Lowe’s. While both Home Depot and Lowe’s dropped fewer inserts this year compared with last year, Home Depot’s decline was more pronounced from nearly seven inserts in 2010 to four in 2011. Interestingly, while home/hardware retailers experienced decreases in number of drops, the number of pages did not parallel the same level of decline. Home Depot’s pages only dropped by 7% and Lowe’s actually increased their average page count by 9% in 2011 compared with 2010. Sears charted the greatest percentage increase in inserts with 37% increase this May over May 2010.
When looking at number of pages, Macy’s, Safeway and Walmart showed the strongest increase in number of pages on a year over year comparison, while Best Buy and CVS decreased their pages by 24% and 18% respectively.
It’s important to note a number of factors that should be considered when examining the number of inserts and pages retailers send into the marketplace. Market Track’s granular level of data reflects regional versioning and market specific differences. This is accomplished through an extensive collections process, including physically obtaining the ads from the various markets in which they are distributed. In the instance that retailers send additional circulars to a limited number of markets, Market Track’s information reflects these nuances through numbers with decimals (for average number of inserts per market) and odd numbers (for average number of pages).