Beyond the BRICs

There’s been a lot said about the BRICs in recent years, particularly about retail. It’s true that they are still powerhouses for growth: Russia is back on the map and China continues to grow as only China can. But our experience at the MAPIC conference in Cannes last weekhighlighted that there’s another world out there, a bigger one, and one that goes beyond the BRICs.

The so-called CIVETS – that’s Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa – were talked about a lot and now retailers and developers alike are gauging which of these have the best prospects for growth. Their economies are maturing and politically they are relatively stable, but the key factor for retail is the projected growth of the middle class. A developing middle class is inimitable news for a retailer looking to develop their business. The middle class love to consume.

In one speech, Debenhams spoke of the importance of these emerging markets to their growth strategy. They already have interests in Vietnam, Malaysia and Iran. Meanwhile, some of the busiest stands at MAPIC were the Egyptian shopping centre developments such as Cleopatra Mall, Cairo… and it wasn’t just the traditionally adorned Cleopatra models that were grabbing the attention! The scheme is a perfect example of what modern shopping centre development is all about: mixed use, superlative service provision and a destination environment. Shopping centres with valet service, free broadband, hotels and even aquatic shows are where retailers want to be. Furthermore, these schemes are slowly correcting the shortage of quality real estate in these markets – a problem which is still an issue but no longer a major barrier. As the real estate continues to improve, better domestic franchise partners for foreign retailers will also emerge, further increasing the appeal of the market.

To us, the message is that significant growth in traditionally core markets will be difficult in these straightened times and the real opportunities will come from further afield. Of course, more mature markets like Poland and Sweden still offer much potential, but don’t be surprised if over the next few years more of our well known brands dip their toes into the Chile’s, Lebanon’s and Turkey’s of this world.

Leave a Reply

Your email address will not be published. Required fields are marked *