China and digital to dominate retail
Global – A recent report by the Economist Intelligence Unit (EIU) foresaw a retail world dominated by current emerging markets – namely China, the digital realm and a shift in the role of brick-and-mortar stores.
To date, China has already overtaken the U.S. as the world’s largest food and grocery market, next year will see its surpassing Japan in the demand for luxury goods, and by 2016, it will beat the U.S. as the world’s biggest retail market, according to the report.
So its dominance in the future almost comes at no surprise, given that big brands like Walmart and Carrefour have already made its mark in the country.
Though luxury houses like Burberry, PPR and LVMH may seem overexposed now in the mainland, the report said that their investments will pay off in 10 years' time.
Vice-versa, emerging markets’ companies have also made significant appearances in the West, but mostly in primary or manufacturing sectors.
In the future, however, EIU suggested that this will shift to more consumer-type brands, naming examples like Chinese food group Bright Foods and Hong Kong-listed Hutchison Whampoa, which are already in the market.
The report goes on to say that a number of current Western brands will be acquired by emerging markets.
In the digital space, mobile commerce is predicted to be a mainstream means of shopping given its ease for checking bargains and comparing prices. The report foresaw a rise in bargain driving technologies like Groupon.
This shift also moves the role of brick-and-mortar shops, which, in the future, will act as a channel for consumers to see, touch and try out goods rather than purchasing.
To even out the playing field, EIU suggested that retail stores to up their game in digital integration – Walmart has already reported to be considering hologram technology, for example – or disperse into smaller, centrally located stores to meet consumers’ immediate needs.
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- Economist Intelligence Unit
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