Thanks to a burgeoning economy and increasingly wealthy middle class, Asia is playing a dominant role, so much so that many have deemed the 21st century, the ‘Asian Century’. And for good reason, most of the fastest growing economies in the world are in Asia, along with the worlds next two superpowers; India and China. In such a climate, it’s only natural that retail hotspots will spring up all across the continent and while that happens, it’s equally important for businesses and investors to keep track of the cities that are experiencing the fastest growth:
With a massive USD 57 Billion in retail sales, Mumbai is leading India’s commercial revolution. It has a massive population and a flourishing middle class bolstered by an ever-expanding young population that are getting new, well paid jobs in the IT and service industry, and have a lot of disposal cash to spend. Premium brands are slowly finding their feet but mid-range brands reign supreme, with Amazon recently making a notable entry into the market.
Instability in the Mindanao region and general political opposition to President Rodrigo Duterte has contributed to the country hitting a three-year low in terms of economic growth in 2018, yet retail continues to grow. Tied with Mumbai at USD 57 Billion in retail sales, Manilla sees a higher number of premium brands and a stronger influx of East Asian tourists, changing the scenario from the trends seen in Mumbai – something to take note for investors and businesses alike.
At the hub of Indonesia’s incredible rise and blessed with an immense surge of global tourism thanks to its proximity to places like Bali and Sumatra, Jakarta enjoyed USD 67 Billion in retail sales last year and all economic indicators point towards the same for the year to come. It has both a large population as well as large spending power, owing to better economic equality than the Mumbai and Manilla. Additionally, Indonesia sees tourists of all economic classes visit, which has seen retail stores and malls of all classes open creating an incredible diversity in the quality of the goods bought and sold. All of this makes Jakarta incredibly ripe for retail investment.
The Chinese population reach newer levels of opulence every day as the country sees both a surge in wages and an increase in cashless transactions. Led by the Alibaba Group Holding Limited empire, the Chinese are buying and selling more than ever and nowhere is this more prominent than Shanghai, a city once described by Trevor Noah as “…a hundred New Yorks”. Its USD 105 Billion in retail sales plays testament to that.
However, a number of Chinese cities are close on its trail. Chongqing (92 Billion) and Guangzhou (82 Billion) have also seen an upsurge in retail sales over the past decade. Cashless-ness is the way China operates, so if you want to run a successful retail business here, you better make a deal with Alibaba to get listed on their marketplace. (You may have tough luck getting noticed otherwise!)
You can’t talk about business in Asia without mentioning this tiny city state. When they were cut off by Malaysia, most people didn’t give this country much of a chance economically. However, astute leadership and a very liberal approach to trade and commerce has seen Singapore experience astronomical growth. It has one of the highest number of bilateral trade relationships with other countries (which is also reflected in Singaporeans having the strongest passport in the world) and this means retail channels are open up from all directions. Its melting pot of cultures also sees products bearing the signatures of different ethnic groups.
As retail heads over to Asia, you would do well keep a track of the market. This is the Asian Century, after all. Smollan is an international retail solutions company delivering growth for clients across five continents by covering every aspect of how a brand is managed at the point of purchase. Smollan is successfully serving clients in all the five, top retail hotspots of Asia and has a footprint across 13 countries in the APAC region.