APAC expansion targeted by retailers

Retailers across the Asia-Pacific region are increasingly seeing international expansion as a viable business strategy, accounting for nearly one-third (30 per cent) of new entrants into the region compared to 17 per cent four years ago, according to a report by property-firm CBRE.

Apart from food and beverage retailers, mid-range fashion and beauty brands are the most active players in the region, followed by luxury retailers.

“APAC retailers are becoming a driving force in the region, spurred on by potential revenue growth and the need for stronger brand awareness,” CBRE head of retail, advisory and transaction services Asia Vivek Kaul said.

“This expansion is not one focused on one single market – instead, it reflects the diversity and dynamism within Asia Pacific’s retail sector.”

China, Hong Kong, Taiwan and Singapore are listed as the most popular markets for brand expansion, due to their status as major retail hubs, and the ability to afford retailers greater visibility across different markets.

The report found that over half of APAC retailers entering new markets have a presence in one or two countries, signifying the regions retailers are still in an early stage of expansion.

CBRE referenced several trends and challenges seen by internationally expanding retailers, such as insufficient knowledge of international tax and business structures, foreign direct investment regulations and consumer trends that apply to each market within the region.

Additionally, e-commerce is put forward as a cost-effective option for retailers looking to enter into a new market, but unable to front the money to build a physical presence. An e-commerce expansion could be spearheaded through setting up an online, market specific store, or through partnering with a leading e-commerce platform or marketplace.

Additionally, while setting up a flagship store in a prime retail location will maximise brand exposure, pop-up stores allow a business to test the potential of the new market and offering interesting, innovative retail experiences without investing too much.

This article first appeared in Inside Retail, a sibling publication to Inside Franchise Business.