China ranks as the most attractive emerging market for apparel retailers according to a study by global management consulting firm A.T. Kearney. Its first place ranking was driven by the country’s large population and the growing disposable income of the middle class. With its compound annual growth rate of more than 20 percent in recent years, apparel retail in China has grown at a rapid pace, and this trend is expected to continue for the next five years.
China was followed in the ranking by two Middle East Countries, U.A.E. and Kuwait, then by Russia and Saudi Arabia.
“Retail formats in China are diversifying beyond traditional department stores. Chinese consumers are beginning to shop at venues such as hyper markets, specialty stores, outlets, discount stores and online,” observed Hana Ben-Shabat, a partner with A.T. Kearney and co-leader of the study.
Foreign companies, including luxury brands, are aggressively entering the market. American clothing retailer Gap, Inc., opened stores in Beijing and Shanghai in late 2010. PVH Apparel Group also entered China with its IZOD brand and plans to open 3,000 stores over the next five years. Italian retailer RDM announced an investment of US$910 million to set up five Italian-style luxury outlet centers in China.
The United Arab Emirates holds the second position in the 2011 Apparel Index, driven by a population with a high disposable income and immense fashion consciousness. The expatriate populace and tourism in particular are driving forces of consumption in this market. Additionally, the UAE is a regional commerce center in the Middle East, and is a preferred market for entering the Middle East as well as testing new products and retail formats.
Kuwait is ranked #3 in the Apparel Index. Key factors driving retail growth in Kuwait are a favorable long-term economic outlook, a sophisticated consumer base with high levels of disposable income and fashion awareness, more women entering the workforce, and a significant expansion in retail real estate. The gross leasable retail space in Kuwait has expanded from 345,000 square meters in 2006 to 1.15 million square meters in 2010.
The remaining top ten markets in the 2011 A.T. Kearney Retail Apparel Index are Russia, Saudi Arabia, India, Brazil, Turkey, Vietnam and Chile (see chart below). Read full story>>
Source: A.T. Kearney