Thirty-nine of the world’s top 250 retailers now operate in Australia, up two from last year. Australian retailers are warned to be extra vigilant, with international retailers set to enter our retail market further in 2017, according to Deloitte’s 2016 Global Powers of Retailing report.
With 16 percent of the world’s top 250 retailers currently operating in Australia, coupled with a relatively stable economy, significant discretionary spend and strong consumer demand for international products and brands, we can expect further disruption in the Australian retail market with new entrants highly likely.
“Australian retailers will need to be vigilant in ensuring they are differentiating themselves from their competitors by offering the right product range and mix and delivering a service, in-store and online, that meets their customers’ expectations,” said David White, partner and national leader of Deloitte’s retail, wholesale and distribution group.
At present, the Australian market remains relatively unsaturated by the world’s largest retail brands compared to the US and European markets, according to White. “In the last quarter of 2015 we learnt South African retailer Steinhoff had secured a deal with UK department store Debenhams to sell a selection of its private label apparel through its Harris Scarfe stores. And, in its first venture outside of South Africa, Mr Price has entered the Australian fast-fashion market, branded MRP, with two stores in Melbourne.”
Whilst new global retailers look to Australian shores, those already here continue to expand their operations, including Sephora and US retailer Williams-Sonoma, both set to continue their store expansion programs in 2016.
Amazon, ranked 12th, is the number one e-commerce retailer globally according to the report, followed by Apple, China’s largest B2C online retailer JD.com and Walmart in the US. All but six of the Top 50 online retailers are based in the US (26 companies in total) or Europe (18). The majority of the e-50 (39 companies) are omnichannel with bricks-and-mortar stores as well as online and other non-store operations.
China to Enter Soon
With nearly half of the 39 Top 250 global retailers which operate in Australia based in the US, one country conspicuous by its absence is China. Whilst China has nine retailers in the Top 250, none currently operate in Australia.
“Many of the products we buy are manufactured in China, however unlike other sectors we have yet to see Chinese retailers entering the Australian market directly,” said White. “The growth in the middle classes in China is already prompting a surge in consumer demand and Chinese developed brands. It is only a matter of time before we see these emerging retailers expanding their businesses more globally, including Australia.
Deloitte’s retail report also highlights the impact of technology on the digital divide between online retail and in-store, and evolving consumer expectations. “Some retailers may underestimate the digital influence, while others recognise the real opportunity to capitalise on this ‘digital divide.’”