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China named as emerging retail market by AT Kearney Index
30
Jun '12
A.T. Kearney’s Global Consumer Institute released the 2012 Retail e-Commerce Index, “Online Retail: The New Frontier for International Expansion.”

This index examines the top 30 countries in the 2012 A.T. Kearney Global Retail Development Index and ranks the top 10 based on the retail e-commerce potential. The 2012 Retail e-Commerce Index reveals that large emerging markets with an active online user base and solid infrastructure offer retailers the greatest e-commerce potential in the near-term.

The Retail e-Commerce Index analyzes 18 infrastructures, regulatory and retail-specific variables to help retailers devise successful global e-commerce strategies and identify emerging market investment opportunities. The higher the ranking, the more potential a country has in the e-commerce sector.

Hana Ben-Shabat, A.T. Kearney partner and study co-leader commented, “Online retail in developing markets presents retailers with attractive growth prospects either by adding e-commerce to already existing store networks or as a market-entry vehicle. Entry via the online channel allows retailers to build their brands and learn about consumers without having to invest in store openings.”

Retail e-Commerce Index Results

China’s vast online retail market drives the country to the top ranking on the Retail e-Commerce Index. China’s current online retail market size of US$ 23 billion is second only to the United States and is predicted to explode over the next five years growing at 29 percent a year as Chinese infrastructure and online purchasing behaviors evolve.

While multiple categories are popular among Chinese online shoppers, consumer electronics and apparel are the largest two categories.

Mike Moriarty, A.T. Kearney partner and study co-leader said, “China’s infrastructure challenges hinder realization of the country’s full e-commerce potential.

Delivery infrastructure varies outside of metropolitan hubs and inhibits the efficiency and effectiveness of the ‘last mile’ of online retail product delivery.”

Brazil’s online market potential is a key factor in the country’s number two e-Commerce Index ranking. The country’s active online user base commands US$ 10.6 billion in online retail sales, the largest in Latin America.

Brazil’s online market is predicted to expand 12 percent a year over the next five years as online shopping becomes more mainstream across most retail categories. Appliance and consumer electronics are the most common products sold online in Brazil.

Online apparel sales are marginal as the fashion savvy Brazilian consumer values the social experience that comes with in-store shopping.

Russia is ranked number three in the 2012 e-Commerce Index, driven by a large online user base and a significant online retail market. Russia has 60 million internet users, the largest online population in Europe, and 15 million online shoppers.


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