At a time when mature markets were scrambling to boost demand,
consumer demand remained strong for retailers based in emerging markets such as India, Brazil and Russia in the year through June 2013, says a report by consultancy Deloitte Touche Tohmatsu.
"Retailers are successfully adapting their strategies to adequately cater to the growing middle-class consumers in emerging economies where there is strong demand for consumer goods, ranging from cars and electronics to personal care products," says Gaurav Gupta, Senior Director, Deloitte Touche Tohmatsu India.
The report, named Global Powers of Retailing 2014, identified
250 largest retailers in the world but it did not feature any Indian company.
The three retailers listed on the Bombay Stock Exchange did well in the reported period. Revenue at the three companies -Tata Group's Trent, Shoppers Stop and Future Retail - grew during the year. Apart from Shoppers Stop, net profit rose at the other two retailers.
The Indian retail industry, pegged at $490 billion, has seen a lot of activity with regard to not just foreign direct investment (FDI) and foreign players entering the country in the past couple of years, but also from Indian retailers. The most recent development was Delhi Chief Minister
Arvind Kejriwal's decision to withdraw FDI in multi-brand retail earlier this week.
Gupta says that India appears to be on a low economic growth trajectory. "However, as an emerging market, India promises a positive long-term outlook for global as well as Indian retailers," he says.
According to the report, retailers in the Asia-Pacific region excluding Japan posted gains, but not at the double-digit level recorded in the prior two years.
The global retail industry, says Ira Kalish, Deloitte's Chief Global Economist, got off to a difficult start but bigger retailers benefited from the increased consumer spend. This provided a much-needed boost to global revenues with nearly 80 per cent of the top 250 (199 companies) retailers posting an increase in retail revenue, Kalish says.
The report also noted that emerging market retailers accounted for more than half (26) of the world's 50 fastest-growing retailers in the year through June 2013. The Asia-Pacific region stayed ahead on the curve with regard to e-commerce, while North America saw the slowest growth. In the year, on average, 7.7 per cent of sales for the 250 companies came from the online medium.
"The e-commerce landscape, still heavily dominated by regional and local companies, especially in emerging markets, will increasingly include international players as more brands attempt to go global," says Gupta. "But to gain acceptance from foreign consumers, e-retailers will need to localise their offers and their operations - just like their brick and mortar counterparts."
Among global retailers, US giant Walmart grew in its leadership position while France-based Carrefour fell to fourth place as sales fell due primarily to the spin-off of its hard discount chain, Dia, in July 2011.
UK retailer Tesco rose to second place, followed by US-based Costco.
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