Emerging markets are attracting an increasing number of international retailers and competing with established global retail centers as the most targeted destinations for retailers, according to the new edition of the How Global is the Business of Retail? report by leading global real estate adviser CB Richard Ellis (CBRE). The annual report has seen significant shifts in its ranking of global retail cities in the past year, with emerging markets including Beijing, Shanghai and Moscow improving their positions within with top 10, and with Riyadh, Jeddah and Kuwait City moving into the top 20 list of the most penetrated international retail markets for the first time.
CBRE's annual survey - now in its third year - mapped the global footprint of 294 of the world's top retailers across 69 countries, exploring the globalization of the retail industry at national and city levels and highlighting differences between sectors and regions, thereby identifying trends in the patterns of global retail expansion.
Attracting 56% of all international retail brands surveyed, London retained its number one city ranking in the latest report. However its position is increasingly being challenged by Dubai, with the second highest presence of international retailers (55%). Dubai's number two position globally reinforces the significance of emerging markets to the new global retail landscape. Rounding out the top five, London and Dubai were followed by the established markets of Paris (46% of international retailers), New York City (44%) and Hong Kong (43%) respectively, which clearly still hold global retail pulling power. The composition of the rest of the top 20 in its mix of traditional and emerging markets gives an indication of just how global the international retail business really is.
Geographically, in terms of CBRE's study of new openings, the primary beneficiaries of the global retail expansion process in the past year were the emerging markets. Where Europe has previously dominated the list of top retail cities, Asia and the Middle East account for almost half of the top 20 most international markets in the new report. A number of Middle Eastern cities have made significant progress in the global hierarchy, moving sharply up the ranking. Notably, Riyadh (from 25th to 14th), Jeddah (26th to 15th) and Kuwait City (28th to 17th) made marked jumps, with Jeddah and Kuwait City entering the top 20 for the first time. Asia is also strongly represented with a combination of new and established markets in the mix: Hong Kong, Beijing, Tokyo and Shanghai, ranked fifth to eighth place respectively, and Shanghai enters the top 10 cities for the first time (moving from 12th to 8th). Milan was the only major European city to improve its position, moving up five places from 16th to 11th in the past year.
Peter Gold, Head of EMEA Cross Border Retail, CB Richard Ellis, commented: "The composition of the top five most international retail cities is hardly surprising as these are large international capital cities, with strong and local regional catchments, and attract large numbers of affluent consumers. They also have high levels of tourist and business visitors, and are therefore very attractive locations for international brands.
"The globalization of store networks is continuing despite the challenging conditions retailers have faced in many markets. At the moment, even the largest and most dominant cities of the world currently attract, at best, only half of even the best known international retailers. Many brands remain in the early stages of exploring new cities, and a third of those surveyed have yet to venture outside their home regions. Factor in those retailers who have not even begun the process of moving overseas, and the true potential for further globalization of the retail market becomes strikingly clear. Whilst 'primary' cities such as London and Paris continue to attract the majority of international retailers, secondary cities such as Riyadh and Kuwait are seeing a surge in new retailer openings."