This index uses Planet Retail data on 500 of the largest global retailers and examines their entries into new territories. Entries into Malaysia and Indonesia make up more than half of emerging Asia’s total. In comparison, Brazil, Russia, India and China—the BRIC countries recorded just one entry each, except India which did not see an entry during the period.
“The timing of entry into a new market is crucial, too early and the market is not ready, too late and the competition is entrenched,” said Chris Donnelly, managing director of Accenture’s Retail practice. “These findings suggest that retailers are already eyeing up the next big thing for international growth. Previously the BRIC countries were a greater focus for retailers, however, the early entrants into these markets have shone a light on the challenges, which provides the next wave of entrants with more information about the risks and rewards.”
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In a challenging economic climate and with more demanding shoppers, globalization is fast becoming a vital component of any retailer’s long-term success strategy. Planet Retail offered its global retail intelligence to facilitate the Accenture’s analysis of market entries and the impact on global view of retail strategy.
The retailer universe identified by Accenture and Planet Retail encompassed the top retailers by grocery sales and the top retailers by nonfood sales, a total of 489 retailers. During 15 July–15 October 2012, there were 43 market entries.
The most popular mode of market entry globally was organic growth. However, the research showed a growing trend towards website launches as the preferred entry vehicle. Launching a website is an easy, low risk way to test a market for your brand. This route can also provide retailers with crucial insights ahead of opening stores, such as what consumers in that region are buying and where those consumers are located.
Fashion retailers are extending their brand reach with 15 market entries, 13 through stores and two via e-commerce. The entries spanned 12 different countries, eight in emerging markets and the remaining four in mature markets.
Grocery retailers made 12 market entries during the monitored period. Three e-commerce market entries came from three of the largest global grocers and took place in emerging markets. This suggests that they are more focused on building a seamless multichannel customer experience and operating model in existing markets than planting flags in new markets.
The United States is still the largest, single marketplace in the world and though it is extremely competitive and overstored, it does have a long history of being the launch pad for new concepts. It continues to be the most attractive, established market for retailers to enter, either as a location for a flagship opening or as part of a larger market entry strategy.
Emerging Asia is the target region of choice for new retail market entries, securing 13 out of the 43 market entries. And while fashion retailers are making efforts to extend their brand reach, global grocery players are consolidating in existing markets.