chapter 03 retailing in other countries

8/7/2019 Chapter 03 Retailing in Other Countries

1/23

Managing Retailing Oxford University Press 2007 All rights reserved

Chapter 3

Retailing in Other Countries

Chapter Objectives:

Apprise of happenings in World of Retailing

Find out about difference in retailing in different countries

Look at prevalent and emerging formats in countries other thanIndia

Draw key success factors


2/23


International Retailing Scenario

India is the last large Asian economy to liberalise its retail sector

In Thailand, Malaysia, Taiwan, Thailand, and Indonesia more than 40% of allconsumer goods are sold through supermarkets, convenience stores anddepartment stores

in China, more than a tenth of all consumer goods are sold through modernretail formats

Latin America witness a degrowth in retail sales in 2006

Eastern Europe and Australasia are fastest growing regions

North America, Western Europe and Asia-Pacific regions account for about85% of retail sales.


3/23


Growth of Retailer by Products

fastest growing retailer types are health and beauty (30%)

home furnishing and fixtures (19%)

mixed retailers (19%)

Durable goods retailers (18%)

Food retailers (14%)

Clothing and footwear retailers (11%)


4/23


Share of retailers (Product Based)

Food retailers (37.2%)

Mixed Retailers (12.2%)

Home furniture and household goods retailer(10.7%)

Durable goods retailers (4.5%)

Clothing and footwear retailers (7.7%)

Health and beauty retailers (6.7%)

Leisure goods retailers (7.2%)

Other retailers (13.8%)


5/23


Leading Retailers (US$ Million)

Wal-mart

Carrefour

Royal Ahold

Home Depot

Tesco

Kroger

Aldi

Metro

Schwaz group

Sears, Roebuck & Co


6/23


Retailing in the U.S

The U.S. has the largest retail market in the world

Nongrocery retailers contributed to about 70% of sales

About 2 million retail establishments in the country employover 20 million people or 18% of the countrys work force

more than 75% of retail establishments are single outlet,

independent stores


7/23


Retailing in the U.S

Time stresses have made shopping a chore rather than a source of recreation

Priorities have shifted from buying things to experiences (family vacation, lessons)

Boomers are saving for their own retirements and their childrens education

Consumers are more price conscious and tend to buy at end season sales

Shopping earlier a function of price and quality now includes convenience andentertainment

Precision Shopping has become more prevalent reducing impulse purchases as

well as random store visits

increasing popularity of Internet shopping


8/23


Retailing in Asia

Asia has been witnessing entry of American and European multinationalretailers into the emerging markets

Key drivers of growth are

Asian currency crisis giving the global players an opportunity to take over

of some Asian retail chains

Liberalisation has facilitated take over of some Asian retail chains byCarrefour, Wal-Mart

New retail formats enticing consumers with merchandising which camewith economies of scale

Globalisation


9/23


Retailing In Asia

80% of Chinese shoppers shop now either in supermarkets or hypermarkets

In Thailand, Malaysia and Indonesia the spending at modern trade outlets isincreasing

Convenience stores have the greatest penetration and acceptance in TaiwanHong Kong, New Zealand and Thailand

In Vietnam wet markets are popular as the shopper visits a wet market nearlyevery single day

The department store industry in South-east Asia is witnessing consolidation


10/23


Retailing In Philippines

up to 65 per cent of retail outlets in the Philippines are consideredtraditional outlets like supermarkets, groceries, wet markets and smallmom-and-pop stores

The retail liberalisation law is designed to benefit the large Filipino-owned mall operators because of the high capitalisation hurdles,designed to protect small Filipino retailers

Influx of foreign retailers will lead to retailer consolidation, especially inthe food/grocery, department-store formats and homefurnishings/electronics


11/23


Retailing In Indonesia

95 %they of retail outlets in Indonesia remained traditional,independent ones


After the Asian crisis in 1997 improved economic health of thecountry

Stability of the Rupiah in mid-1999

Increased spending surge due to changes in lifestyle andurbanization

Upgradation of operations and increased spending in IT solutions


12/23


Retailing In Malaysia

Out of the total retail outlets in the country, traditional formatsconstitute about 63 % of outlets

hypermarket sector constituting only between 4% and 5% of retailturnover


Implementation of economic stimulus programmes by the government

Consumer protection and maintenance of price stability by thegovernment

Implementation of the Franchise Development Programme

Internet start-up retailers encouraged by the government


13/23


Retailing In China

Shanghai is the hub of retail activity

According to industry statistics, some 70% of the worlds top 50retailers are already in the China

The opportunities are equal for all retail sectors, be it apparel,cosmetics and toiletries, department stores, fast-food or supermarkets

China is said to be the world's second largest online population

It has the fourth-largest e-commerce market in Asia and 11th in theworld, and its online commerce is expected to nearly double every yearfor the next four years


14/23


Retailing In Taiwan

Traditional wet markets and mom-and-pop stores were the main foodretailing channels

They are replaced by the rising modern food retailing formats such asconvenience stores, supermarkets and hypermarkets

Hypermarkets and convenience stores are the two fastest growingretailing formats witnessing rapid expansion in terms of outlets andsales growth

In contrast, sales turnover of independent grocers and wet marketshas been declining


15/23


Retailing In Taiwan


Greater consumer spending on non-food items, higher disposableincomes and improved living standards

Changes in shopping habits of consumers moving from neighborhood

stores to the one-stop shopping destinations offered by large stores

Diminishing traditional joint family and growth of working women

low percentage of car owners making it preferable to shop atconvenience stores rather than supermarkets

traffic and communication infrastructure lowering costs for the retailer

recovery in the regional economy


16/23


Retailing In Japan

metamorphosis in both small and large-scale retailing

Japanese small-scale retailing include pervasive use of independent retailstreet associations for governing local retail operations

evolution of corporate chain systems composed of shops of relatively smallsize

remarkable growth of convenience stores significantly upgraded inmerchandising sophistication

appearance of corporate chains of smaller shops for specialty goods,

particularly within the electrical and clothing sectors

The general merchandise store retailers are in the centre of an evolutiontowards conglomerate merchandising


17/23


Key Drivers of Japanese Retailing

Japanese are avid consumers of expensive retail services in the form ofconvenience, quality, and prestige

Gift giving in Japanese society accounts for as much as 7 percent oftotal retail sales which has propelled growth in prestigious departmentstores


18/23


European Retailing

The top three food retailers in terms of revenue as listed by Fortuneslist are European: Metro ofGermany, Carrefour of France and Tesco ofUK

Of the worlds major food retailers, the UK Asda group is number onefor profit in proportion to revenue


19/23


Retailing in U.K.

continued dominance of the large chain operators

difficult to find independent operators in UK high streets, as they areunable to compete with large chain operators in terms of price or range

increasingly consolidation by multiple operators of larger outlets,resulting in less competitive smaller independent operators beingforced out

number of supermarkets increasing steadily over the period, asconsumers desire for convenience

Increase in internet retailing


20/23


Retailing In U.K.

Key Drivers

Consumer demand for convenience and accessibility

competitive prices

proliferation of car ownership and the attraction of the one-stop shophas meant consumers still generally choose to shop at supermarkets

Market consolidation, improving retail technology, superior economiesof scale driving retailing


21/23


Retailing in Germany

retail market in Germany shows signs of polarisation

The upper end consisting of branded products, exclusive goods andservices and the lower end comprising of discount products and privatelabels

The middle and traditional retail areas have been continuously losingout in this process

Internet sales, television shopping and factory outlet centres are in

infancy stage


22/23


Retailing in France

The French retail landscape is double-sided: large stores, usually located on the

outskirts of towns/cities, co-exist with smaller outlets in downtown locations

Drivers of growth

shorter working week leading to increase in free time for French people to indulge

in leisure activities and hobbies, thus benefiting retail sub sectors such asDIY/gardening/hardware, furniture/home furnishings, record/video games, sportsgoods and booksellers/stationers

Growing ageing population as a driver for growth y for chemists and druggists

Creating differentiation between chains through branding in order to increaseincreasing store loyalty


23/23


End of Chapter 3

chapter 03 retailing in other countries

Documents