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With more than 240m people, and a rising middle class, Indonesia is favoured as a future retail hotspot by Nicholas Holt, head of Asia Pacific research at Knight Frank. “It is quite a compelling story. Indonesia has a very large population, it is urbanising, and there is a rise in the middle class. “The country seems relatively stable

and is more insulated because it is less reliant on trade than some of the other countries in south-east Asia. This is because of natural resources, but also


Growing consumer spending power, low country risk and an unsaturated market has put Botswana at number 20 on the 2012 AT Kearney Global Retail Development Index. It is the country’s first time on the index, and it is the only country in sub-Saharan Africa to make the list of the top 30 most attractive markets for retailers among developing nations, highlighting the country’s long- term growth prospects. In the report, AT Kearney consultant Phillip Bode says: “The country has become a middle-income nation over the past three decades and is projected to have 7% GDP growth for 2012 – well above sub-Saharan Africa’s expected growth rate. Botswana’s government is dedicated to shifting away from a dependence on diamonds to increasing investment in the private retail sector.”

because domestic consumption makes up a fair amount of their GDP. Holt believes that the capital, Jakarta, will be the place to watch as an up-and- coming retail destination. However, he warns that there are

still “issues” in Jakarta, particularly with regards to infrastructure. “Jakarta is still crazy, with poor infrastructure. They have a lot of hurdles to get over.” But, Holt adds: “It is a place where a

lot of international investors are very interested in what is going on there.”


Given that India has long been talked about as a hot market, it may seem that it has already reached a peak. But, if the figures forecast for the subcontinent ring true, then India’s future remains very much a hot prospect for investors and retailers. The country’s per-capita income is

projected to expand by 200% between 2010 and 2020. This compares with projected growth in the UK and US of about 20% over the same period. Countries such as Britain outsourcing

call centres and other industries to India at the turn of the century led to the growth of a new middle class with new spending power. But – and in India’s case this is a


Russia is still proving attractive, with high demand from retailers and many undergoing impressive expansion, according to Cushman & Wakefield. In January-November 2012, Magnit opened 810 new retail stores, increasing its total retail space by 29.9% and total income by 33%. And Subway plans to open 23 new restaurants in the Moscow region alone. The success of the retail market is

backed by the increasing income of Russian consumers, which grew by 6.7% in November 2012 compared with November 2011 and by 4% in January- November 2012 (compared with the same period in 2011), says Cushman & Wakefield. In November, the average monthly salary grew by 14.2% compared with November 2011 and was 27,607 roubles. Meanwhile, Moscow and


The country with more than 1.35bn inhabitants has been a dominant player in the world’s retail market for the past few years.

St Petersburg are still much sought- after for luxury retailers.

But it is still thought of as a hotspot. “China’s

vast size and seemingly relentless economic growth mean it will

always dominate any analysis of the Far Eastern markets,” says Peter Cummings, director at project manager Turner & Townsend. Dominate, and

also attract all retailers. According to Gary Thursby, director of cross-border retail at Colliers, Debenhams and New Look, have

made opening in the country a top priority, and they are not alone. Initial target cities are predominantly Shanghai and Beijing.

Summer 2013 43

big but – there are many barriers to entry that have flummoxed even global conglomerates such as Wal-Mart, and UK giant Tesco. Quite simply, it is the restriction of foreign investment. India last year approved 51% FDI in multi- brand retail, paving the way for Wal- Mart and other global retailers to set up shop. But retailers remain wary of clauses in the regulations, which include some sourcing from within the country being mandatory. Also, individual states can make their

own decisions on whether or not to allow FDI in their respective areas. While it has been a tough road for

retailers, the opening up of India’s retail sector to foreign investment does seem inevitable – it’s just a matter of when.



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