Brazil: Top Developing Economy For Global Retail Expansion

Geny Caloisi

A report by A.T. Kearney today released its 2011 Index of top ranked developing countries for global retail expansion reveals that South American Countries Occupy Top 3 Positions, China Slips to 6th Place and India Drops to 4th

In the 10th annual Global Retail Development Index (GRDI), Brazil jumped to first place from #5 in last year’s study.

The 2011 GRDI ranking mirrors the dramatic changes that have taken place in global markets, and the varying impacts they have had on different emerging economies.  South American countries have fared well during the recession posting an impressive six per cent GDP growth in 2010. In addition to Brazil’s top ranking, three other South American countries, Uruguay, Chile and Peru, made the Top 10 of the GRDI.

Michael Moriarty, A.T. Kearney partner and study co-leader said, “Brazil is an attractive target expansion market given expected GDP growth of five per cent per year over the next five years, a large and highly urban population, and surging retail sales.” He also noted, “In addition to the substantial investment in infrastructure the Brazilian government is planning, inflows of foreign capital are rising dramatically as well.”

Uruguay climbed up the rankings to #2 this year, from #8 in last year’s GRDI. The country is riding Brazilian coattails, and experienced significant GDP growth of 8.5 per cent in 2010. The country’s limited scale combined with positive macroeconomic conditions makes it an interesting choice for retailers looking to expand into more contained markets.

Chile rose to #3 in the ranking after a strong recovery from the 2009 recession. It is now considered one of Latin America’s most competitive markets. The government created incentives to stimulate retail consumption, and as a consequence Chile’s GDP grew 5.2 per cent in 2010 and is expected to grow another 6.1 per cent in 2011.

Another region that ranked highly in the 2011 GRDI was the Middle East and North Africa. While the political unrest may affect immediate plans to enter countries such as Egypt and Tunisia, the region’s extraordinarily young population (more than 60 percent between the ages of 15 -39) could result in greater economic stability and integration into the world economy in the long run. Kuwait, Saudi Arabia, and the UAE (all top 10 GRDI markets in 2011) have not experienced the turmoil of some of their neighbors and are expected to remain stable going forward.


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