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One-third of new APAC retailers considering rapid expansion, says CBRE report

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The number of new retailers expanding across the Asia Pacific region has increased rapidly compared to the figures four years back.

As per a report released by CBRE Group, a Los Angeles-based a commercial real estate services and investment firm, one third, or nearly 30 percent, of newly entered retailers in the APAC region are considering rapid global expansion as a feasible business strategy compared to just 17 percent of retailers four years ago.

Aside from food and beverage retailers, beauty and mid-range fashion brands are the most active retailers in the APAC region, while luxury retailers are the third most active players.

According to Vivek Kaul, the head of the Retail Advisory and Transaction Services business for CBRE group, APAC retailers are emerging as driving force in the region encouraged by potential revenue growth and the necessity for more robust brand awareness. He also added that the expansion isn’t concentrated on one particular market; rather it reflects the dynamism and diversity within the region’s retail sector.

Singapore, Hong Kong, Taiwan, and China feature prominently on the list of the most popular markets for brand expansion because of the reputation as important retail centers, and the ability to give retailers better visibility across a wide range of markets.

The report also indicated that more than 50 percent of retailers in the Asia Pacific region venturing into new markets are present only in one or two countries, signaling that the retailers in the APAC region are still at a nascent stage of expansion.

CBRE mentioned various trends and challenges that can be viewed by globally expanding retailers, such as inadequate knowledge of foreign direct investment regulations, consumer trends, and international tax and business structures that are applicable to each market within the Asia Pacific region.

Furthermore, e-commerce is presented as a lucrative option for retailers considering venturing into a new market with the lack of capital to fund for the development of a physical presence.

Retailers can lead an e-commerce expansion either by setting up an online, market-specific store or by collaborating with a major e-tailer or online marketplace.

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