China ‘still attractive’ for retailers

Even with less-bullish economic growth, China remains impossible for retailers to ignore.

AT Kearney’s Global Retail Development Index has ranked the nation as the second most attractive country for retail investment after Chile.

Retail sales in the world’s most populous country increased 13 per cent in 2013 (to $2.6 trillion), and consumer confidence rose.

Looking ahead, urbanisation, increasing disposable incomes, and a loosening of the birth-control policy are expected to fuel future growth.

Meanwhile, Malaysia moves up four spots to ninth, its highest ranking since 2007. Malaysia has a small population (almost 30 million) and economic growth softened in 2013, but its high income per capita of $10,600 and young population (nearly half of Malaysians are younger than 25) make it a strong and stable market.

Indonesia (15th) remains a strong retail market in the mid-to-long term. Sales growth in the world’s fourth most populous country was flat as the economy slowed and consumer confidence stayed low, but total sales area grew rapidly, indicating retailers’ anticipation for strong long-term growth behind a large, young, urbanising population, rising incomes, and infrastructure development.

India drops six spots to 20th place, its lowest-ever ranking in the GRDI. Retail is still hindered by high consumer price inflation, currency fluctuations, high current account deficits, government debts, and strict foreign direct investment policies that have long been an impediment to growth.

The Philippines reenters the GRDI in 23rd as stable political environment, an increasingly affluent population, strong liquidity, and sustainable long-term infrastructure development are boosting consumer confidence.

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