The world’s largest retailers have been scaling back their global expansion activities, particularly in Asia.
And they are turning their attention inward by integrating operations and strengthening their store, internet and mobile sales channels, reveals a study.
According to the Accenture Globalisation Index, the retailers who entered 43 markets on July 15 – October 15, 2012, decreased to just 17 in the following quarter: October 16, 2012 – January 15, 2013.
New-market entries include the opening of a new retail format – physical store or website, launch of a new country-specific website, acquisition of a company in a target market, creation of a joint venture or launch of a franchise in a target market.
Moves by retailers into the six key markets in “emerging Asia” – China, Indonesia, Kazakhstan, Malaysia, Pakistan and Thailand – fell significantly – from 13 out of the 43 new-market entries during the first quarter to just two in the second quarter. Accenture believes the drop indicates a retrenchment by retailers as they turned their attention from international expansion to multichannel reorganisation.
“The operating model and supporting infrastructure required by retailers to meet their customers’ expectations for a seamless experience across all available channels is both time- and capital- intensive,” said Chris Donnelly, global MD of Accenture’s retail practice.
“These results suggest that retailers are focusing more on getting it right at home before exporting it internationally. Part of their effort to integrate the e-commerce experience into the main business may require a reorganisation of the roles and responsibilities of the company’s top management team, which may be reflected in the decline seen in international expansion as retailers turned their attention to strengthening their internal structure.”
Meanwhile, Accenture found out that the US remains an attractive market despite the competition as big retailers made five market entries in the market in the July 15 – October 15 quarter, an indication that the country remains a popular target for expansion.
“The United States is still the largest single marketplace in the world and, while it is incredibly competitive and overstored, it does have a long history of being the launch pad for new concepts,” said Donnelly.
Contrastingly, India was one of the countries of less-focus as it recorded no retailer market entries.
“Previously, Brazil, Russia and India were a greater focus for retailers seeking to expand into new markets. The experiences of the early retail entrants shed light on the challenges they faced and provided the next wave of entrants with more information about the risks and rewards,” said Donnelly.
