As the world gears up for a recession-weary environment, that is relentless and filled with challenges, there is also a great concern over how the retail market is doing amongst it all.
Sales are expected to increase for the retail sector in the coming five years, with a lot of the growth coming in from countries, such as India and China. However, there is no denying that there is a downturn in expectations of profits coming from Russia and Brazil. Russia continues to face the consequences of the effect of sanctions in the country for it’s position in Ukraine and Brazil is still a country in economic turmoil. Investment has poured in emerging markets, such as Vietnam, Mexico, Indonesia and Turkey.
The Chinese economy is growing at a stagnant pace, when you compare it to how fierce it looks on the outside to the West and there are also fears of a property bubble enfolding nationally, not-to-mention the rising concerns over how a curtail of wealth exhibition, will now impact consumerism. On the other hand, the new government in India has made it so that foreign investment be discouraged in the country, cutting up opportunities that should have been present for multinational retailers. This is because there is not enough shelf space for many of these brands, in a country expected to cross the trillion dollar mark this year.
Profits raked in from greater liberalisation could help build the necessary infrastructure and also push for more reforms. Another recession is being worked on very hard to be avoided, as positive sentiments colour both China and India, over the benefits of retail sales to the economy, amongst the general happier mood of progressive development. The retail market stands to lose a lot in China if the government does not speed up it’s efforts to crack down more on corruption and slash gift-giving attitudes.
The market has already surpassed the United States to become first, the biggest e-commerce market in the world, and soon, by 2018, will become the biggest market in the world. Meanwhile, in India, the retail sector could stand to gain a lot if a greater amount of resources are poured in to develop a brighter e-commerce future, better infrastructure, as well as subsequently, lower rates of inflation.