China, India and Malaysia are the top three markets in the latest AT Kearney Global Retail Development Index (GRDI), which ranks the top 30 developing countries for retail investment worldwide.
Indonesia is fifth on the list, followed by Vietnam (11), Sri Lanka (12) and the Philippines (16).
Published since 2001, the index analyses 25 macroeconomic and retail-specific variables to help retailers devise global strategies to identify emerging market investment opportunities.
During the past 15 years, developing markets have seen tremendous growth both in terms of population, which has grown 21 per cent to 6.2 billion, and in terms of retail sales, which have increased 350 per cent in developing countries and now represent more than half of total global retail sales, says the report.
Of Malaysia ranking a surprise third on the table, AT Kearney said while the country was not huge and not growing especially fast it is business-friendly.
“Third-place Malaysia is the most business-friendly environment among Southeast Asian countries ranked in the GRDI (18th in the World Bank’s Ease of Doing Business Index), and retailers remain bullish about its potential despite slowing GDP growth, a depreciating currency, and recent corruption scandals,” the report said.
“The market for both small-format grocers and hypermarkets is hot. In convenience, 7-Eleven Malaysia announced it would open 200 stores and upgrade 200 more, while Bison Consolidated announced an upcoming IPO along with plans for 150 new convenience store openings by 2017, in a bid to compete with incumbent 7-Eleven. GCH Retail, Dairy Farm’s subsidiary in Malaysia, announced plans to open six new Giant hypermarkets and refurbish 28 additional stores.
A global management consulting firm, AT Kearney has offices in more than 40 countries.