BRIC Nations to lead in retail by 2022, Mobile Commerce will become the mainstream shopping – Economist Intelligence Unit

Source: Economist Intelligence Unit

By 2022, the emerging countries of China, India, Russia and Brazil will become four of the six largest retail markets in the world, states the new report generated by the Economist Intelligence Unit.  The report predicts that the US will be the next largest market at US$4.5 trillion, followed by India (US$4 trillion), Japan (US$1.6 trillion), Russia (US$1.5 trillion) and Brazil (US$1.2 trillion).

“India, Brazil and Russia are stepping out of the shadow of their Western neighbors to become retail powerhouses. By 2022 these emerging markets will form four of the six largest markets in the world in US-dollar terms, and perhaps five of the top seven if the Indonesian market continues to grow. In ten years’ time the Indian market alone could be a comparable size to that of Western Europe”, states the report.

Two Indian conglomerates, Tata and United Breweries, a Chinese food group – Bright Foods, and Hong Kong-listed Hutchison Whampoa have all made inroads into Western consumer markets. Hutchison owns AS Watson, a leading global health-and-beauty retailer. By 2022 the current flow of outbound mergers and acquisitions (M&As) from emerging markets will develop into a flood, with cash-rich Chinese, Brazilian and Indian conglomerates seeking to carve out a share in less buoyant Western markets, especially in Europe, where retail weakness could offer the best value.

Emerging-market growth will define the retail landscape of the future, not just in terms of demand but also by playing an increasingly acquisitive role in Western markets, which could lead to some familiar brands becoming Chinese or Indian owned.

Online commerce in the form of ecommerce, mcommerce and scommerce, is expected to account for one-third or more of sales in markets like the UK and the US, compared with around 10% now. Although emerging markets will have further to go, the rate of growth is even more rapid.

Mobile commerce will be a mainstream means of shopping by 2022, as more consumers make impulse purchases directly on mobile platforms. S-Commerce, led by investment in traffic drivers such as Pinterest, will add a further dimension to virtual shopping.

By 2022, bargain-driven technologies such as Groupon and Mysupermarket will have merged and expanded into sophisticated sites tailoring and personalizing the best offers for consumers, it said.

Despite the rise of online commerce, bricks-and-mortar stores will not disappear by 2022, but will play a very different role as the retail landscape evolves, and stores will act as a channel for customers to see, touch and try goods, predicts the EIU.

For mass-retailers, their chain stores can be utilized as pick-up centers for the fast growing “click-n-collect” hybrid channel, where consumers buy online and then collect from a pre-agreed store instead of having to wait for the postman. These outlets can also offer returns and customer service for web-bought products, removing much of the inconvenience associated with faulty or unwanted items that are bought online, recommended the report.

Report states that this multi-channel approach has not be lost on online retail giants Amazon and eBay and both are taking steps toward building physical operations, already “eBay has experimented with pop-up showrooms in key shopping locations, partly to generate publicity and partly to test interest. Amazon has taken a further step in adapting, by setting up “lockers” to appeal to click-n-collect consumers.”

Smaller retailers will be the hardest hit by this transition, but as mass-retail stores start to thin down, smaller independent businesses may benefit from footfall once again.

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