Where has international retail been big? Who’s leading the charge? Below we profile six of the top retail markets worldwide. Destinations in China, Ukraine, Germany, Singapore, Dubai, and Brazil have recently topped the list for new retail openings.
While the Chinese economy has cooled somewhat in recent years, it still represents a major market for U.S. retailers seeking to expand. Relatively high GDP growth rates combined with an expanding middle class and a corresponding increase in consumer spending have kept China in prime position for retailers set on expansion.
Hong Kong is a major hot spot for retail, though it’s important to understand a few crucial differences between Hong Kong and Mainland China. While well over 90% of Hong Kong’s population is ethnic Chinese, the governmental system and currency are different. China’s major currency is the renminbi with the yuan as the primary unit, and Hong Kong’s is based on the Hong Kong Dollar (HKD).
But those aren’t the only differences. There’s an important distinction between the written forms of Chinese, too. In order to be understood, you’ll want to use Simplified Chinese for Mainland China and Traditional Chinese for Hong Kong. In translation, written Chinese logograms (known as “hanzi” or a “Han character”) will often condense considerably in relation to the English. You will want to keep this in mind when it comes to site layout for content and user interface elements.
After market contraction during the global downturn in 2008, Ukraine retail has recovered impressively with projected growth rates near 20% per year, according to the PMR report referenced in this article, “Retail in Ukraine 2013. Market analysis and development forecasts for 2013-2014.” Disposable income, low inflation, and the popularity of modern retail store formats are prime factors behind Ukraine’s healthy retail segments.
The currency of Ukraine is the Ukrainian hryvnia, and the major languages are Ukrainian and Russian, with Ukrainian serving as the country’s official language. In terms of character display, Ukrainian is composed of Cyrillic characters, like Russian.
Germany and the German language provide international retailers with a massive market which has continued to see interest from major brands around the world. Germany’s hottest cities for retail include Berlin, Hamburg, Munich, Cologne, Frankfurt, and Dusseldorf. Over 66% of new retail concepts in Germany since 2007 have international backers, including major large-scale retailers such as Abercrombie & Fitch, Forever 21, and TJ Maxx.
One thing to note is that German marketing laws prohibit the use of superlatives, so make sure your English copy is toned appropriately. In terms of web design and usability, German design tends to be clear, precise, and content-driven. Standard German will typically yield text expansion in the neighborhood of 20%, so be prepared to adjust things like tables of content, graphics, dialogs, and buttons.
#4 Republic of Singapore
Singapore’s mature economy, based on the Singapore dollar, has seen some recent retail slowdowns, but still earns the expatriate title of “a giant shopping mall” for good reason. Familiar mall favorites such as H&M, Abercrombie & Fitch, Guess, Banana Republic, and Gap all have retail operations in Singapore.
One interesting aspect of Singapore’s retail make-up is the degree to which regional tourists consider Singapore a shopping destination. The country draws visitors from Malaysia, Indonesia, China, Australia, and India, and according to the Singapore Tourism Board, retail expenditures account for up to 36% of tourists’ total spend on trips.
Linguistically, Singapore is complex. According to the country’s 2010 census the top five languages commonly used at home in the country are English (32.3%), Mandarin (35.6%), non-Mandarin Chinese Dialects (14.3%), Malay (12.2%) and Tamil (3.3%).
#5 United Arab Emirates (UAE)
Considered a mature economic market, the UAE welcomed 25 new international retail brands in 2012. The Dubai Chamber of Commerce and Industry cites increases in tourism, an economic recovery and significant capital flow as sources of the retail growth in the region. U.S. brands in the UAE ranged from the fashion to the restaurant sector with Kate Spade, Prada, Franklin & Marshall, IHOP, and Cheesecake Factory all joining the predominantly mall shopping culture in the region.
Online shopping in cities like Dubai has increased recently, but mall retail is still a dominant force. Big brands may want to pay attention to Dubai’s potential for cross-channel integration, however. Alternative payment and fulfillment models are a part of Dubai’s traditionally cash-biased culture, and customers taking offline delivery (in stores) of online purchases is common.
English is prevalent in the UAE, but the Gulf dialect of Arabic is the go-to for companies looking to expand in the region. Adapting to the social norms in the UAE will be an important factor for any western brand interested in succeeding here.
Brazil is an exciting emerging market for retailers, especially those who are interested in the future of online retail in the country. As the number of internet users continues to grow and the number of credit cards increases (up 63% between 2007 and 2012 alone according to Euromonitor International statistics), Brazilians prefer to spend more of their reais (R$) with brands that speak their language.
Social and mobile are especially important factors for brands eager to expand into Brazil. For a country with relatively little background in widespread internet adoption, the trend is to go directly to smartphones and other mobile devices, especially with the government’s effort to provide free Wi-Fi.
Portuguese is the dominant language in Brazil, and many brands have come to embrace sponsorship of local events (and the tailoring of their products to local tastes) in order to gain visibility in the country. As with many languages, idiomatic phrases in English-to-Portuguese translations may be especially tricky for your brand.