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Some shoppers just want to have fun
The retail market is surging in Asia, where many consumers say shopping is their favorite activity.
 NEW YORK (FORTUNE) - Asia is the new hot spot for retail expansion, and for good reason - shoppers there just want to have fun. According to consumer research from data trackers ACNielsen, countries like China, Thailand, South Korea and Malaysia make up nine of the top ten markets for so-called "recreational shopping"—that is, shopping when you really don't need anything.
Not coincidentally, those Asian countries are also among the most attractive areas for retailers to set up shop, with the region accounting for nearly half of the top 20 global expansion markets, according to new data from consultancy A.T. Kearney. Overall, the Asian retail market is projected to grow from an estimated $2.6 trillion in 2004 to $3.4 trillion by 2009, according to consultancy Bain & Co. Driving that growth are the growing middle class populations of countries like China, India, and even Vietnam, where 16 percent of the nation's 84 million residents spent more on consumer goods last year than in 2004. Vietnam moved up five slots to become the third most desirable market for retailers to enter. "Vietnam today is similar to India five years ago," says Mike Moriarty, a vice president in A.T. Kearney's Consumer Industries and Retail practice, who headed up the study. "It combines strong economic growth with a highly fragmented market." Nine out of ten retail stores in Vietnam are mom-and-pop shops, he says, and GDP growth comes in at 7.5 percent. China's retail market, which is growing nearly 10 percent a year according to Bain & Co. estimates, slipped one notch to fifth place on A.T. Kearney's ranking, due largely to saturation from retail giants like Wal-Mart (Charts), Carrefour, and Tesco (Charts). Over the next 12 months, electronics superstore Best Buy (Charts) plans to open its first store there as well. India retained the top spot, followed by Russia. Other Asian nations in the top 20 were Thailand, South Korea, and Malaysia. (The scores are based on a 25 variables across four categories: country risk, market attractiveness, market saturation, and time pressure.) Despite dropping one spot, China is still a retail force to be reckoned with, and is posed to overtake France in the next five years as the fifth-largest retail market in the world, according to Retail Forward. Per capita spending in China should rise from $522 in 2003 to $711 by 2007, estimates Bain. In addition to consumer staples, a good chunk of those dollars will go towards luxury goods like jewelry and watches. Indeed, Asia will command almost 40 percent of the global market for luxury goods by 2010, according to Bain, with China accounting for a nearly 10 percent. And for those Asians who cannot yet afford Patek Philippe watches and Tiffany (Charts) jewelry, daily shopping provides enough of a rush—even if they walk out with nothing. Overall, 84 percent of Asia's inhabitants equate shopping with entertainment, with Hong Kong and Indonesia topping the list at a whopping 93 percent each. In contrast, just over two out of three (68 percent) Americans take pleasure in wandering store aisles aimlessly, but that's nothing compared to the killjoy Europeans, who, as a whole, only shop when it's absolutely necessary. (Note to thrill-seeking shoppers: avoid the Czech Republic at all costs—only half of folks there shop just for the heck of it.) Other findings from the survey, which polled 23,500 consumers: Grocery shopping is perceived as a bore, no matter where you live, while clothes shopping can give you a new lease on life. A full 18 percent of shoppers worldwide found searching for new duds to be "therapeutic," while less than half saw it as a necessary chore. There's just something about a new pair of jeans, apparently. And in Asia, 14 percent of shoppers said clothes shopping was "my favorite thing to do," which doesn't surprise Bernice Hurst, a food industry consultant. "Buying clothes in Asia is an amazing experience—nothing like buying them in a department store in the US or Europe," she commented recently on Retail Wire, a web site for industry insiders. So if shopping's a bore, you know where to hunt for that fall wardrobe. _____________ |
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