According to the Accenture Globalization Index, which analyzes Planet Retail data for nearly 500 of the largest global retailers and examines their entry into new markets, while the retailers entered 43 markets in the July 15 - October 15, 2012 quarter, that number fell to just 17 in the following quarter: October 16, 2012 - January 15, 2013.
New-market entries include the opening of a new retail format – physical store or website, launch of a new country-specific website, acquisition of a company in a target market, creation of a joint venture or launch of a franchise in a target market.
Moves by retailers into the six key markets in “Emerging Asia” – China, Indonesia, Kazakhstan, Malaysia, Pakistan and Thailand – fell significantly – from 13 out of the 43 new-market entries during the first quarter to just two in the second quarter. Accenture believes the drop indicates a retrenchment by retailers as they turned their attention from international expansion to multichannel reorganization.
“The operating model and supporting infrastructure required by retailers to meet their customers’ expectations for a seamless experience across all available channels is both time- and capital- intensive,” said Chris Donnelly, global managing director of Accenture’s Retail Practice.
“These results suggest that retailers are focusing more on getting it right at home before exporting it internationally. Part of their effort to integrate the ecommerce experience into the main business may require a reorganization of the roles and responsibilities of the company’s top management team, which may be reflected in the decline seen in international expansion as retailers turned their attention to strengthening their internal structure.”
U.S. Remains an Attractive Market Despite the Competition
Big retailers made five market entries in the United States in the July 15 – October 15 quarter, an indication that the country remains a popular target for expansion. Additionally, U.S. retailers launched the highest number of overseas expansions – 14 out of a global total of 43 – in the July 15 – October 15 quarter, as well as in the October 16 – January 15 quarter, accounting for seven out of 17 expansions globally.
“The United States is still the largest single marketplace in the world and, while it is incredibly competitive and overstored, it does have a long history of being the launch pad for new concepts,” said Donnelly. “It continues to be an extremely attractive established market for retailers to enter, either as a location for a flagship opening or as part of a larger market-entry strategy.”
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