Emerging markets become critical in the economic slowdown

CONTINUING uncertainty in the global economy may turn the attention of multinational retailers to emerging markets, predicts Dr Ira Kalish of Deloitte Services’ LP – market analysts.
“The turmoil in global markets is having a negative impact on global retailers’ growth but we are continuing to see a rise in consumer spending in emerging markets. In the longer term it is possible we will see the continued rebalancing of the global economy with a shift in consumer spending growth away from the US towards Asia,” commented Dr Kalish.
“The US has been the engine of global growth and a fantastic retail market but it is now mature, and countries such as China, India and Russia may present large growth opportunities for multinational retailers and suppliers.
A number of other factors will also have an impact on consumer spending. The continued high price of oil is likely to persist, as is the recent growth in food prices. The latter has been driven by subsidies for the production of crops for biofuels leading to an overall shortfall in the global stock of crops for food.”
According to the analyst, the retailers who wish to be successful need to deploy resources in the geographical areas with a growth potential, but differentiate through branding, invest in innovation and focus on the customer experience.
“Finally, as we see rapid growth in some emerging markets it is possible that we will begin to see some of the retailers in those markets grow rapidly and globalise. Some emerging market retailers will invest in expanding in their domestic market and may even expand to developed markets,” concluded Dr Kalish.