Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Opportunities lie in emerging markets

Last year, US retail giant Wal-Mart announced that for the first time it would allocate more of its investment billions to emerging markets.

The likes of India and Brazil, rather than mature markets such as the UK and Canada, would take priority in terms of investment. In the UK, Marks & Spencer’s sales are suffering, but its international sales are up almost 27%.

We were excited by Westfield opening in London’s White City - 270 stores in 1.6 million sq ft - but the new Dubai Mall, which opened at a similar time, will eventually have 1,200 stores over 3.8 million sq ft. Perhaps expanding internationally would be a welcome distraction for retailers and brands from the challenges they face at home.

There are huge opportunities in growing and consolidating markets, with consumers that are desperate for western brands and a sophisticated retail experience. With sterling weakening against the dollar, margins will look tighter at home as import prices increase. But for those operators repatriating profits from the many countries that peg their currency to the dollar, the returns have just grown by about 15%.

It is not easy to do, not least as the competition (or potential partner) becomes increasingly sophisticated. My local franchise-run Debenhams in Riyadh, Saudi Arabia, has some of the best standards I have seen under that fascia for a long time. International strategy should be developed methodically by making choices
between markets; adapting a brand and its positioning to the local consumer; and weighing the risks and rewards of organic acquisition, joint venture or franchise business models.

Matthew Cushen is a senior manager at consultancy firm Kurt Salmon Associates

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.