Bangkok--Oct 7--PRIMEZONE
China, India, Turkey, Thailand, Malaysia and Hungary Considered Top Markets for Retail and consumer Investment, According to pricewaterhouseCoopers Study
Transitional Economies Show Varying Degrees of Challenge and Opportunity in Retail and Consumer Sector
PricewaterhouseCoopers launched today the third edition of its Retail & Consumer study, "From Beijing to Budapest: New Retail & Consumer Growth Patterns in Transitional Economies," at the Global Retail & Consumer Business School in Dusseldorf. The study assesses growth opportunities in fourteen countries in Asia, Central and Eastern Europe (CEE) and Russia; it has determined six countries with "GO" recommendations in terms of investment: China, India, Turkey, Thailand, Malaysia and Hungary.
"Our study finds that transitional economies across the globe offer varying degrees of challenge and opportunity for the retail and consumer investor, and while the modernization of the retail and consumer sector is for the most part driven by multinationals, all areas are seeing the emergence of regional players," said Alec Jones, Global Industries Leader, PricewaterhouseCoopers.
The study determines that the most immediate opportunities in the retail and consumer sector lie in China and that India offers more long-term potential for investment in the sector. Turkey, Thailand, Malaysia and Hungary are considered investment havens that offer general opportunities for development in the short or longer term.
Niche opportunities exist in South Korea, Poland, Romania, Czech Republic, Singapore and Slovenia despite the fact that they are already saturated as far as the size of the market is concerned. The study also shows that Russia and Indonesia should be viewed with caution and seen as long-term investment options.
Overall, there are three major trends that emerged after assessing the challenges and opportunities within the fourteen countries covered by the report:
- Price sensitivity is having a significant impact on brand management and the development of private label;
- Expansion from the increasingly saturated major cities into small, regional cities;
- The development of shoppingtainment-- shopping centers with malls and the creation of adjacent leisure activities.
"It is expected that as certain retail and consumer investors take a break after a first phase of investing in these economies that local players will begin capitalizing on their increasing knowledge of modern retailing and their understanding of local cultures to make their presence felt more strongly. This, together with the consolidation of local and foreign retailers investments, will toughen the competitive environment considerably in the future," said Jones.
Addintional findings on the opportunities and challenges facing these high growth markets follow:
Immediate Opportunities in China
- China is the biggest consumer market in the world and membership in the WTO (World Trade Organization) will improve business conditions for companies investing there.
- National and regional brands are still extremely strong, and multionationals have to be aware of the extent to which they need to adapt their products and marketing to the Chinese consumer.
- The Chinese government will play a key role in developing an environment conducive to long-term and sound economic development.
India's Emerging Economy Offers Longer-Term Opportunites
- Consumer goods companies have already established themselves with success in India; there is huge potential for future development as the country modernizes.
- Currently, foreign retail and wholesale investment is restricted to cash & carry outlets and, to a lesser extent, e-commerce.
- India's outstanding capabilities in IT will ensure an extremely rapid and dynamic development in the modern retailing space.
- The new government is designing policies to help improve the lifestyles of its 300 million people. Partnerships between foreign retail and consumer goods companies with local firms will undoubtedly contribute to the improvement of lifestyles and higher levels of employment and consumption, when this becomes possible in the future.
Investment Havens
- Turkey, with its young and growing population, is an obvious targen for companies in the retail and consumer sector. A huge effort is being made to modernize the Turkish economy and accession to the EU would make a significant impact on the country's economic development.
- While regulatory restraints are still an impediment in Thailand, there is plenty of potential for development in this country. Increasing consumer demand and the existence of a burgeoning middle-class make Malaysia and extremely interesting destination for investment. additionally, a young population, low unemployment and a growing modern retail sector all contribute to this country's extremely attractive investment climate.
- While Hungary has a fast maturing retail and consumer market, there are still opportunities left for investment there for hypermarkets, convenience stores and specialized outlets especially outside the capital.
Niche Opportunities
- South Korea, Poland, Romania, Czech Republic, Singapore and Glovenia are already saturated as far as the size of the market is concerned. Although a certain number of general retail development opportunities in these countries stell exist, retail and consumer companies would be better advised to focus on niche investments.
- Singapore and Slovenia's prosperous populations make them targets for nice opportunities.
- Romania, with its current limitations on property and land acquisitions and the limited avatlability of skilled staff and management , also make it a better destination for small, targeted retail opportunities.
Opportunities for the Long Term
- Russia is a potentially huge mass consumer market for the investor and has one of the highest current world growth rates. However, the country is set for an extremely fragile economic, political and social framework.
- For Indonesia, the decisions made by its government will have a profound influence on the country's development in the long term. The changing political and regulatory environment is an impediment to efficient and rapid development for foreign companies.
For more information on the third edition of the pricewaterhouseCoopers Global Retail & Consumer study, "From Beijing to Budapest: New Retail & Consumer Growth Patterns in Transitional Economies," Please go to: www.pwc.com/growth. End.
--InfoQuest (KP)--