New Delhi: With Asia remaining buoyant despite the global economic downturn, global retail and consumer brands plan to expand their presence in the region including India and China, a report says.
According to global consultancy firm PricewaterhouseCoopers’ report, most of Asia continues to present growth opportunities for global retail and consumer-products firms, albeit at a slower rate over the short term.
“For global retail & consumer companies, Asia continues to be the center of economic gravity. Most major retail and consumer brands plan to increase their presence in Asian behemoths of India and China,” PwC India Consumer and Industrial Products leader N.V. Sivakumar said.
“India, in addition to being supported by strong macroeconomic fundamentals, is home to a large and demanding middle class and a large youth market that is responsible for driving retail purchases,” Sivakumar added.
The report written in association with the Economist Intelligence Unit stated, Asia was the most exciting growth region for apparel retailers.
“China and India are both expecting double-digit growth in sales (apparel),” it added.
The report ‘Glimmers amid the gloom: The outlook for the retail and consumer products sector in emerging markets´ discussed outlook for 6 retail and consumer sub-sectors including supermarket chains, apparel retailers, fast food firms, luxury brands and consumer electronics.
Besides, fast food industry is proving to be recession proof in emerging markets. In Asia, affluent consumers are trading down from fine-dining options, but they and lower income consumers continue to be able to afford to eat out.
Moreover, the FMCG companies face an increasingly competitive environment, as consumers focus more on cost and less on brand name. The trend across Asia and Latin America is for the FMCG firms to penetrate markets more deeply and reach lower-income consumers along with their focus on reducing their supply chain costs and investing in marketing.
In terms of sales of luxury brands, Asia has brightest outlook in comparison to other emerging markets.
“Despite the financial crisis, rich Chinese consumers are developing a voracious appetite for luxury goods. India also has huge potential, but regulation prevents rapid expansion,” the PwC report stated.
Meanwhile, consumer electronics companies are facing turbulent times as their goods are expensive, one-off purchases that consumers can delay or forego.
Of the three emerging market regions examined in the report, the picture is most rosy in Asia, the report added.
Asian consumers are likely to continue spending on electronics, particularly on TVs and computers.