- BEIRUT: Retailers in the Middle East and Africa have expanded well outside their home countries, but the vast majority of their sales, 91.8 percent, still come from domestic operations, according to a new report titled "Emerging from the downturn: Global Powers of Retailing 2010" for Deloitte and Planet Retail.
As it looks at the future of the globalized retail industry, the report identifies the 250 largest retailers around the world based on publicly available data for the companies, and provides an outlook for the global economy; a discussion of the major challenges facing retailers; and an analysis of market capitalization in the retail industry.
"The Deloitte report highlights that many emerging-market retailers are rapidly becoming world-class players in their own right," said Omar Fahoum, chairman and chief executive of Deloitte in the Middle East. "This indicates that not only are they well equipped to compete with the global giants in their home markets, some are even becoming competitive in other markets. Several emerging-market retailers have already experienced success in neighboring markets, and this is happening whether in the Middle East, East Asia, Africa, or South America."
As per the report, in the coming years, large emerging markets are set to play a far more significant role in the global economy. However, most discussions to date about the consumer markets of emerging nations have focused on the opportunity for global retailers that are based in developed countries. In contrast, Deloitte's Global Powers of Retailing report states that it is the retailers based in emerging markets, which are the ones most likely to reap the benefits of this greater role in the global economy rather than the relative handful of global retailers that have the gumption to invest in emerging markets.
When it comes to the promise of a rising middle class in emerging markets, the lion's share of attention has for good reason been visited upon China. Yet several other big, emerging markets offer great promise, and not only the other BRICs (Brazil, Russia, and India). The report finds that Egypt joins Turkey, Brazil, India, Indonesia, Mexico, Russia, and Vietnam as one of eight specific countries considered likely to play an important role in the further globalization of retailing.
The report suggests that this phenomenon is likely to become more established in the future as such retailers become regional powerhouses. The next step in the evolution of these players, however, will be investments into developed markets. Some of this is starting to take place with retailers based in emerging markets spotting growth opportunities in much more affluent markets.