It was not long ago that the world's big western retailers, from Walmart to Carrefour and Tesco, talked ambitiously about expanding in Asia -- a region of huge populations and equally large growth potential. They got their market analysis right but their strategies mostly wrong. Today, the Asian retailing market is dominated by Asian retailers: the list below, compiled by Euromonitor, shows just three outsiders (Walmart, France's Auchan and, naturally Amazon) among the top 20.
Carrefour, in fact, pulled out of China just last month, selling most of its remaining stores to Suning, China's leading non-grocery retailer, whose rise, fall and recovery has been analysed in detail by our scoutAsia research team. Tesco was forced to withdraw from China and Thailand earlier, while other European giants like Ahold, Metro and Casino are bit players or not present at all.
That is not to deny the region's rapid growth. The increase in urbanisation (especially in China, India and Indonesia), in single-person households and in the number of richer, older people (particularly in India, Malaysia and Indonesia) is driving household spending. And all of this is on a massive base: one third of the world's population lives in Asia and most are still relatively poor and thus spend a large share of their income on food and basic household goods.
This positive macro environment has, however, attracted lots of (well-funded) competition. Japan's big department stores (AEON) and convenience store chains (such as Seven-Eleven and Lawsons) have spread throughout south-east Asia, as has Lotte from South Korea. In mainland China, Suning and Gome are starting to create national brands and infrastructure for sales of brown and white goods.
But above all, the rise of ecommerce and the "marketplace" concept has fuelled the growth of the giant online platforms -- above all, Alibaba and JD.com from China, who lead the Euromonitor list; but this also explains the presence of Amazon, Japan's Rakuten and Pinduoduo (as well as of Ebay just outside the top 20). It would be rash to bet against them gaining further market share. For traditional western retailers, perhaps retreat really is the better part of valour in this case.