The window of opportunity in emerging markets is still open, although the global economic crisis is having an effect, the World Retail Congress heard this morning.
Tesco international director Phil Clarke said the company would continue to grow, adding roughly the same amount of space this year as last. “Neither Tesco nor the emerging markets are immune to the downturn. If you look ahead at emerging markets over the next three, six or nine months, you could say things are going to be slow or difficult. But you have to take the long term view” he said. “But if you look at the numbers and the scale, the window of opportunity appears to be opening, not closing.”
Wu Jianzhong, chairman of Chinese supermarket business Wumart said: “The window of opportunity is still open, and opening wider.” He forecast that China would take a lead role in the recovery of the global economy. He highlighted the huge sums held by the Chinese in savings, equivalent to $700bn, which he said was waiting to be spent.
Ian Cheshire, chief executive of the world’s third largest home improvement retailer Kingfisher, struck a more cautious note, saying the rules are different for non-food retailers than for supermarkets. He said choosing the right countries for expansion is key.
“For some emerging markets, such as India, it’s too early and the market isn’t ready for a large home improvement retailer yet,” he said.
He added that because of the economic downturn, the company was now focusing on further developing its existing markets rather than building plans to enter new ones, and stressed the need not to generalise about regions such as Eastern Europe, where there is huge disparity between countries like Ukraine and Romania which are struggling, and Poland, which is proving resilient. The key to successfully doing this, he said, was to do proper research including going into customers’ homes.