Middle East countries climb in retail development rankings
Middle East and North Africa countries have moved up in the latest global retail development rankings.
The UAE has ranked at the fifth place to feature among the top 10 most attractive markets across the world in the A.T. Kearney Global Retail Develop Index.
Morocco, at seventh place, rose again in the rankings, up seven positions this year thanks to government efforts to attract foreign investments.
Saudi Arabia (#11) is focusing on diversifying its economy away from oil, and the retail sector is in the spotlight. Mall expansion in Algeria (#14) and a greater tourist flow in Tunisia (#24) have supported retail expansion. Egypt, one of the region’s biggest markets, did not make the 2017 Index because of the uncertainty in the market.
The 2017 GRDI, titled “The Age of Focus,” ranks India as the top developing country for retail investment. India’s strong GDP growth and growing middle class coupled with a more favourable regulatory environment over the past few years have played significant roles in attaining this ranking.
China enters the ranking at a second place despite its slower overall economic growth. The market’s size and the continued evolution of retail still make China one of the most attractive markets for retail investment.
This year, the UAE ranked fifth because it still offers an attractive retail proposition even though growth has slowed down. Innovation was the main theme for the UAE last year – strip malls, unique format, entertainment centers, outdoor cinemas, all aiming to spark and sustain consumer interest. E-commerce has grown at about 30 per cent in the past few years and the recent developments (Amazon purchase of Souq.com and Noon.com) prove the strong growth trajectory of e-commerce.
Despite the challenging economic situation in Saudi Arabia, the other major retail market in the region, the retail sector was quite resilient and grew by 4.6 per cent on 2016. The sector is one where the government aims to create a lot of new Saudi jobs and is focusing on growing modern formats and e-commerce. Recent regulatory changes, such as allowing 100 per cent foreign ownership in retail and increased financing to small retail enterprises, will strengthen the further development of the sector.
“This years` study finds global retailers faced with intensifying competition from local and regional retailers that have grown increasingly more sophisticated. Advancements in retail technology and e-commerce, requires retailers across the world to stop up and rethink their strategies,” Yana Petrova, co-author of the A.T. Kearney study.
The report has also looked in detail at the increasing trend of mobile shopping and its impact on global retail expansion. In many developing markets, mobile retail is the primary form of online. “Mobile shopping is challenging the ways retailers think about global expansion, as well as about their role in the value chain,” says Mike Moriarty, an A.T. Kearney partner and co-author of the study. “We are expecting more retailers to use mobile as part of their future expansions plans.