Hong Kong Is Top Target For New Retail Entrants
Hong Kong is the world’s hottest retail market, attracting significantly more new entrants than any other city, according to the 2013 edition of How Global is the Business of Retail? by leading global property advisor CBRE.
CBRE’s annual survey, now in its sixth year, maps the global footprint of 320 of the world’s top retailers across more than 200 cities, tracking cross-border retailer movements. The report found that retailers expanded into a wide range of markets in 2012, with 81% of cities seeing at least one new retailer enter the market.
U.S. retailers are by far the most aggressive when expanding store networks globally. Traditionally U.S. retailers have focused on Asian and Western European markets; however, they are increasingly targeting the Middle East (18% of all new entrants to the region were from the U.S. last year), Central & Eastern Europe (17%), and Latin America (10%). Italian, British and French retailers are also highly active, focusing mainly on their own region, although Asia is also a key target.
Hong Kong was by far the most sought after city with 51 new retailer entries from all sectors – not just the high-end fashion brands that have traditionally targeted the market. These new entrants are principally from Europe, but also from the U.S., Japan and Korea.
Peter Gold, Managing Director – Retail, Cross-Border EMEA, CBRE, commented:
“Hong Kong provides an opportunity for retailers to capitalise on the emerging middle class population and tourists from mainland China. Hong Kong is often used as a launch pad for brands entering the region although increasingly retailers are entering Chinese cities directly. While luxury brands led the way in 2012, retailers from across the spectrum opened their first store in the city last year, including Pierre Cardin, Forever 21 and Cos.”
Mature markets dominated retailers’ expansion plans last year although six emerging markets made the top 20. Kiev was in second place with 39 new entrants, with Sao Paulo (25 new entrants), Iasi (19), Muscat (17) and Ho Chi Minh City (15) also important targets. This is the second year that Kiev has been ranked in the top 3 globally. A combination of strong growth in real incomes and a serious under supply of quality retail space in the city is driving major shopping centre development, which in turn is attracting a wide range of retailers including Prada, Camper and S. Oliver.
Berlin was in third position in terms of new entrants (28) with Frankfurt (20), Hamburg (19) and Munich (19) also featuring in the top 20. Low unemployment, rising wages and employment levels at record highs have created strong fundamentals for consumption in Germany and are encouraging retailers to target a wide range of cities. Notable new entries in Berlin include Mulberry, Hollister, Pull & Bear, and Zara Home (which also entered Munich).
Singapore (25) has quickly established itself as a regional hub, and is used as a gateway by international retailers looking to expand in South East Asia. The city has benefitted from an influx of regional tourists, to attractions such as the “Gardens by the Bay” and the “River Safari”, while new shopping centre development continues to create opportunities for global retailers to enter the market.
In terms of the world’s most mature markets (by the number of international retailers that already have a presence there), Dubai saw 25 new entrants in 2012, closely followed by Paris (24), London (23) and New York (20).
Europe was the most targeted region attracting 49% of new entries, followed by Asia with 24%, and Middle East and North Africa (MENA) with 11%. Latin America, North America, and the Pacific region attracted 9%,