March 11, 2024
DHAKA – With most of the world still reeling from the lasting impacts of Covid-19, most nations are struggling to cope with economic recovery. While it is expected that certain nations would be able to endure and recover rapidly, certain underdogs, especially in the Asia Pacific region, seem to be holding their front well, especially in the retail market.
According to the Global Retail Development Index (GRDI), Asia Pacific nations have displayed remarkable growth trajectories in 2023. Five Asian countries – China, India, Malaysia, Indonesia, and Bangladesh – have secured positions among the top 15 economies for retailers to prioritise establishing a presence in, based on the GRDI.
The GRDI focuses on the top 30 to 40 emerging economies and evaluates their attractiveness to retailers based on each market’s unique challenges and strengths. The evaluation includes an assessment on parameters such as economic health and stability, government policy, competitive activity, penetration of modern trade, consumer behaviour, and demographic, social, and cultural considerations.
China and India expectedly emerged as the frontrunners due to the sheer size of their markets and rapid growth in consumer base, but the three other nations have also highlighted their exemplary growth and overall potential for excellence.
China is known for its innovative technologies. This allowed for experiential concepts in retail to flourish and ensured room for a highly digitised retail market, capable of driving consumer spending.
India’s immense working population gives its retail sector the greatest edge. That, coupled with rapid urbanisation and government initiatives to digitise the country and a growing e-commerce scene, worked as good incentives for global retailers.
Indonesia, on the other hand, benefits from its growing middle-class population and rapid expansion in infrastructure and urbanisation. The Philippines and Cambodia also demonstrated a similar potential for growth since they too are experiencing rapid urbanisation and a growing middle class population, the report notes.
For the Philippines, the report also mentions that the nation has a large proportion of young, urban and affluent shoppers that have led it to be an incredibly dynamic market. On the other hand, for Cambodia, reopening the borders to international tourists have driven tourism related retail industries, such as apparel and footwear, to a favourable spot.
Bangladesh is another notable example of an emerging market experiencing immense development in the retail industry. Behind its success and advancement lies its already strong ready-made garment industry that allows for great exports and allows international brands to be attracted significantly, contributing directly to Bangladesh’s economy.
With prospects of a growing population, technological advancements, favourable policies and innovation, markets across the Asia Pacific region are proving to be crucial for retailers to be involved with, globally, the report notes.
This year’s GRDI has also highlighted key trends that have had the most significant impact on developing nations. These include macroeconomic uncertainties in the post-COVID world, increasing inflationary pressure on consumers, the continued growth of e-commerce as a sector, the strength of omnichannel in regards to retailer strategies, the rising dependence on electronic payments and pay-later systems, and the increasing use of Artificial Intelligence among retailers.