Grdi 2012

Global Retail Expansion:
Keeps On Moving
Global retail is finally growing into its name and
becoming “global.” While the largest developing
markets continue to attract most leading retailers,
a handful of smaller untapped countries are
getting a second look.

Global Retail Expansion: Keeps On Moving

1

While Europe faced another year of economic turmoil in 2011, developing countriesforged
full-speed ahead. With consumer confidence improving and spending increasing, global
retailers continued their expansion into these markets. In the past five years, U.S.-based
Wal-Mart, France-based Carrefour, U.K.-based Tesco, and Germany-based Metro Group
saw their revenues in developing countries grow 2.5 times faster than revenues in their
home markets.
The 2012 A.T. KearneyGlobal Retail Development Index™, the 11th annual edition, finds a wide
array of possibilities for retailers seeking to capture an immediate impact and a growth
advantage in developing countries. Possibilities abound not only in the biggest markets,
but also in many smaller countries around the world. The GRDI ranks the top 30 developing
countries for retail investment. Figure 1 on page 3highlights the rankings, while the study
methodology is the appendix on page 26.

Global Retail: An Evolving Profile
The 2012 GRDI finds global retail expansion with a different profile than it had a decade ago
when we published findings from the first Index. While the world’s largest developing markets—
particularly the BRIC nations of Brazil, Russia, India, and China—still tempt the largest globalretailers and show no signs of slowing down, many smaller, untapped markets are providing
new profit frontiers, particularly for regional and specialty players. New entrants in the 2012
Index include several small gems such as Georgia, Oman, Azerbaijan, and Mongolia that
are becoming attractive destinations for global retailers, particularly specialty and luxury
players. These markets,though small in total retail market size, appeal to retailers targeting
a concentration of wealth and seeking to be first movers in fast-growing markets.
For the second year in a row, Brazil holds the top position in the GRDI, leading the way for
Latin America, which has seven markets represented in the Index. Botswana, new on the Index,
stands as a precursor to steady development of Sub-SaharanAfrica, which could emerge
as a major player in the GRDI in coming years.

Georgia, Oman, Azerbaijan, and
Mongolia are small gems for retailers
seeking a concentration of wealth
and a first-mover advantage.
Additionally, technology is transforming the way retailers operate in developing markets.
Shoppers’ expectations and behaviors are evolving, driven by both the economic climate
andincreased access to information through technology. Consumers are more connected
than ever to brands, merchandise, and their fellow shoppers. The proliferation of channels and
media outlets for retailer-consumer interactions has forced retailers to approach international
expansion from a multi-channel perspective. Even in developing markets, people are increasingly
willing to purchase online.Growth in e-commerce and mobile commerce outpaces physical

Global Retail Expansion: Keeps On Moving

2

Figure
Global Retail Development Index™
On the radar screen
Market
attractiveness
( %)

Country risk
( %)

Market
saturation
( %)

Country

Region

Brazil

Latin America

Chile

Latin America

.

China

Asia

.

.

Latin America

.

.

.

IndiaAsia

.

.

Georgia

Central Asia

.

.

United Arab
Emirates

MENA

.

.

Oman

MENA

.

.

Mongolia

Asia

Peru

Latin America

Malaysia

Time
pressure
( %)

.

Uruguay

rank

.

.
.

GRDI
score

.

.

.

.

Change in
rank compared
to

.
.

.

+

.

.

–

.

.

.

–

.

.

.

N/A

.

.

....