Thailand ranked 6th in top 10 target markets for Asian retailers in 2014
April 10, 2014 00:00 By THE NATION 3,787 Viewed
ASIA-PACIFIC retailers are focused on expanding in the region, according to a recent global report by CBRE Research.
The “How Active Are Retailers Globally?” survey found that Asia-Pacific-based retailers saw significant potential in their own region, and that all of their top 10 target destinations for expansion this year are within it.
Thailand is ranked sixth as a target for 29 per cent of Asia-Pacific-based retailers, while China is the most sought-after market (58 per cent), followed by Vietnam (48 per cent), Malaysia (42 per cent), Indonesia (39 per cent), and Singapore (35 per cent).
“The relatively lower levels of interest by Asia-Pacific retailers in expanding in American and European markets reflect a cautious attitude to expanding out of their core markets, but that said, we are beginning to see a number of Asia-based brands working on strategies for global markets. For example, Chinese brand Bosideng opening on Oxford Street in London and a number of other Chinese brands looking to launch [in] New York and Australia,” said Sebastian Skiff, executive director of CBRE Retail.
Around 14 million square metres of new retail space is currently under construction in the Asia-Pacific region. Half of the new supply is in China, mostly in Shenzhen and Guangzhou. The bulk of the remainder is in Southeast Asian markets including Bangkok and Kuala Lumpur.
“In [the fourth quarter of] 2013, four new retail projects opened in Bangkok providing around 40,000sqm of new space,” said James Pitchon, executive director and head of CBRE Research and Consulting in Thailand. “The total retail supply in Bangkok at the end of 2013 stood at 6.32 million square metres, consisting of shopping malls, which shared 61 per cent of the total market and can be categorised into three main types: community mall, enclosed mall, and onsite retail facilities.”
Global retailers’ targets
The report found that retailers globally were predominantly targeting countries with mature retail sectors, although a number of
emerging markets in the Asia-Pacific region also featured strongly.
Retailers originating from Europe have shown a strong bias towards their own region, with fewer than 15 per cent targeting other markets. Retailers from the Americas are biased towards the United States, but are also targeting European markets, and in particular Germany.
China leads the way for the Asia-Pacific region, ranking as the fifth-most-popular destination for global retailers, with 22 per cent of surveyed retailers targeting the market this year.
Jariya Thumtrongkitkul, senior manager of retail services at CBRE Thailand, said: “International brands that expanded their business lines in the Thai market in [the fourth quarter of] 2013 include Sephora and Victoria’s Secret Beauty & Accessories at Siam Center, Pull & Bear at Siam Center, and Brioni’s first store at Gaysorn Plaza. Mid-range fashion brand openings included Carhartt, Pedro, and Kenneth Cole at CentralWorld Plaza.”
In Vietnam, middle-class consumers with rising incomes and a hunger for style continue to draw retailers’ interest. Ho Chi Minh City and Hanoi were both ranked in the top 10 cities of most new retailer entrants in 2012 and 2013, according to CBRE’s “Retail Hotspots in Asia Pacific” report. The liberation of foreign direct investment on wholly owned retail businesses from 2015 is expected to stimulate this trend further.
Meanwhile, the economies of Malaysia and Singapore are strengthening and as a result, consumer sentiment is expected to improve in both markets.