RETAILING GLOBAL INDUSTRY OVERVIEW

January 2019
INTRODUCTION
GLOBAL OUTLOOK
LEADING COMPANIES AND BRANDS
TOP FOUR TRENDS SHAPING THE INDUSTRY
MARKET SNAPSHOTS
INTRODUCTION

Scope

 This report analyses the retailing industry, which includes the following Disclaimer
categories. Much of the information in this
briefing is of a statistical nature and,
while every attempt has been made
to ensure accuracy and reliability,
Euromonitor International cannot be
held responsible for omissions or
errors.
Grocery Retailers - USD6.1 trillion
Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
Non-Grocery Specialists - USD5.7 trillion companies’ opinions, reader
Retailing – discretion is advised.

USD14.9 trillion The global retailing industry is

Mixed Retailers - USD1 trillion
Non-Store Retailing - USD2.1 trillion
undergoing a transformation as
internet retailing continues to
grow, both as a channel and a
means of interacting with
shoppers. This briefing serves
as a guide to the current state of
play, running through key
regional trends as well as the
four most important global
trends for the next five years.

Note: Grocery Retailers, Non-Grocery Specialists and Mixed Retailers only include sales through stores.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 3

INTRODUCTION

Examining four trends shaping retailing

Trend Expected long-term implications Historic Forecast

significance significance

China will be the fastest growing retailing market over the

next five years. While it will not happen in the next five
Asia is the future
years, it is not difficult to imagine China becoming the
largest retail market in the world within the next 10 years.

In 2021, internet retailing will become the largest channel

The permanent shift globally, accounting for 15.4% of sales. In 2023, that
to internet retailing proportion will be 17.6%. Retailers will need to respond
to the permanent consumer behaviour of buying online.

With stagnant incomes, the middle class, especially in

Squeezed middle developed countries, are more value-orientated than
classes ever. Retailers must bear this in mind when it comes to
their own positioning and their competition.

Advances in technology have reshaped consumer

behaviour and the shopping journey is no different.
Omnichannel retail
Retailers will need to adapt, blending digital and physical
is a necessity
experiences to meet consumers’ demands for a
seamless shopping experience.

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INTRODUCTION

Areas of opportunity

Grocery Retailers Non-Grocery Mixed Retailers Non-Store Retailing

Specialists

The discounter Jewellery and watch Variety stores will be Within non-store
channel will be the specialist retailers the fastest growing retailing, cross-
fastest growing will lead the way in channel within mixed border sales will be
channel in grocery growth within non- retailers. The largest the fastest type of
retailing through grocery specialists geography for transaction.
2023 despite being thanks to India, opportunity is in the Spending on cross-
heavily concentrated which will account US. Variety stores border transactions
in a few countries. In for 60% of growth. are moving into rural accounted for some
2018, discounters Indians prefer to areas that big box 10% of total global e-
only accounted for invest in gold and retailers are leaving. commerce in 2018.
5% of global grocery jewellery, especially However, these This is expected to
retailing, but that in light of a cooling retailers are increase to 12%in
share is expected to real estate market. experimenting with 2023. The fastest
climb to 5.7% in store formats for growing countries in
2023. urban areas. absolute terms will
be China, France
and Canada.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 5

INTRODUCTION
GLOBAL OUTLOOK
LEADING COMPANIES AND BRANDS
TOP FOUR TRENDS SHAPING THE INDUSTRY
MARKET SNAPSHOTS
GLOBAL OUTLOOK

Retailing sales growth to remain relatively stable

 Retailing sales growth remained

stable from 2013 to 2018. The
average growth rate during this
period was 2.4% while growth in
2018 was slightly less at 2.2%.
 The average growth from 2018
to 2023 will be slightly higher at
2.9%. Global retailing sales are
expected to show a 2.9%
growth rate. The total size of the
market will likely stand at
USD17.2 trillion in 2023.
 China and the US will be the top
growth markets in absolute
terms, led by strong growth in
their internet retailing channels.
 Internet retailing is expected to
become the largest channel in
the world in 2020, surpassing
supermarkets. Some 14% of all
retail sales in that year will be
through the internet.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 7

GLOBAL OUTLOOK

Internet retailing drives non-store retailing to be the top growth channel

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 8

GLOBAL OUTLOOK

The digital revolution is happening at different speeds

 While internet retailing, a part of

non-store retailing, will be the
fastest growing channel globally,
its impact varies greatly by
region. In some cases, such as
the Middle East and Africa,
internet sales still account for a
small portion of retail sales and
will continue to do so in the near
term.
 Two markets - China and the US
- are predicted to account for
60% of the growth in internet
retailing over 2013-2022, with
China continuing to grow at a
faster pace.
 It is also important to note that
how people shop digitally differs
between regions. In Asia Pacific,
the bulk of digital commerce will
be through mobile devices, while
computers will remain dominant
in North America.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 9

GLOBAL OUTLOOK

China and the US show the greatest growth opportunities

 Already the largest retailing

market, China is expected to
grow the fastest in absolute
terms through 2023 thanks to its
large population and increasing
wealth. There does remain
economic uncertainty which
could impact the forecast
figures.
 Internet retailing will be a large
driver of this growth driven by
greater mobile adoption.
 While a mature market, the US
will be the second strongest
growth market in absolute terms
over the next four years. It is
also facing economic
uncertainty at the start of 2019,
but the unemployment rate
remained low and consumer
spending strong, which should
help its performance going
forward.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 10

INTRODUCTION
GLOBAL OUTLOOK
LEADING COMPANIES AND BRANDS
TOP FOUR TRENDS SHAPING THE INDUSTRY
MARKET SNAPSHOTS
LEADING COMPANIES AND BRANDS

Scale benefits internet retailers

 The global retailing industry

remains fragmented with the top
four companies accounting for
10% of the market in 2018, but
this varies by region.
 In Australasia, the two largest
retailers, Wesfarmers and
Woolworths, hold a steady 36%
share. However, the leading
retailers are experiencing more
competition. Aldi in Australia is
gaining share and moved into the
top five in 2015 and Amazon
entered the country in late 2017.
 North America and Asia Pacific
has seen a concentration in the
top four leading retailers thanks
to the scale gained by their
leading internet retailers -Amazon
in the US and Alibaba and
JD.com in China. These retailers
will continue to benefit from the
shift to internet retailing.

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LEADING COMPANIES AND BRANDS

Walmart declines while Amazon grows

 Walmart has struggled with its

big box business model. While it
has turned its store business
around in its largest market, the
US, its Japanese and Canadian
mass merchandiser brands
continued to suffer. The biggest
drag on performance is its UK
hypermarket brand, Asda, which
suffers from competition from
discounters, Aldi and Lidl.
Walmart agreed to sell its UK
business to Sainsbury’s in 2018
while retaining a 42% stake. At
the time of writing, the deal had
not been approved by the
government.
 Amazon’s impressive growth in
share is thanks to its
marketplace model, which offers
endless selection and low prices.
This combined with fast delivery
helped Amazon grow quickly.

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LEADING COMPANIES AND BRANDS

Internet retailers lead the way in growth

 The fundamental and dramatic REPLCE THIS CHART

shift to internet retailing in China
has meant that the top three
fastest growing retailers in the
world are Chinese.
 Despite the maturity of the US
retail market, Amazon has
benefited from the country’s
shift to online sales, where it
controlled 53% of internet
retailing in 2018.
 These top four fastest growing
retailers also benefit from
having a marketplace model.
The marketplace model has
network effects where third
party merchants offer endless
assortments and compete on
price, which lures in more
customers. More customers
means that more third party
merchants join the marketplace.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 14

INTRODUCTION
GLOBAL OUTLOOK
LEADING COMPANIES AND BRANDS
TOP FOUR TRENDS SHAPING THE INDUSTRY
MARKET SNAPSHOTS
TOP FOUR TRENDS SHAPING THE INDUSTRY

Key megatrends shaping global retailing

Shifting Market Markets in frontiers will account for over 43% of global disposable consumer income by
Frontiers 2030. Nine of the 10 fastest-growing major consumer markets of the future are in Asia
and Africa. This means that most of the growth opportunities for retailing are in Asia and
Africa. In Asia, consumers are leapfrogging to internet retailing, especially mobile, which
will be the fastest growing channel. Meanwhile in Africa, more consumers will opt for
grocery retailers, shifting away from the traditional, informal markets.
Connected Global internet penetration will be 51% in 2019 - the first time in history that the
Consumers majority of the world will have internet access. This digital connectivity, which
underpins the very existence of Connected Consumers, has altered all aspects of life.
Consumers leverage this connectivity for purposes such as entertainment, education,
knowledge, social sharing and shopping. As a result, internet retailing will be the
fastest growing channel in the next five years.
Middle Class Middle-class households in developed economies - those with a disposable income
Retreat between 75% and 125% of the median - have not experienced any significant
improvement in their standards of living since the 2008-2009 global financial crisis, as a
result of weak or stagnant income growth and continued economic uncertainty. This has
favoured retailers that focus on low prices.
Shopping Shopping Reinvented reflects how economic and technological shifts have rewritten
Reinvented the shopper journey holistically. Today, shopping is a journey, whose purpose is not just
buying, but relationship building. This elevates the importance of the entire journey
(pre-purchase, purchase and post-purchase). Retailers now much focus on blending
their digital and physical channels seamlessly to offer an omnichannel experience at
each of these points of the shopper journey.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 16

TOP FOUR TRENDS SHAPING THE INDUSTRY

Examining four trends shaping retailing

Historic Forecast
Trend Expected long-term implications
significance significance

China will be the fastest growing retailing market over the

next five years. While it will not happen in the next five
Asia is the future
years, it is not difficult to imagine China becoming the
largest retail market in the world within the next 10 years.

In 2021, internet retailing will become the largest channel

The permanent shift globally, accounting for 15.4% of sales. In 2023, that
to internet retailing proportion will be 17.6%. Retailers will need to respond
to the permanent consumer behaviour of buying online.

With stagnant incomes, the middle class, especially in

Squeezed middle developed countries, are more value-orientated than
classes ever. Retailers must bear this in mind when it comes to
their own positioning and their competition.

Advances in technology have reshaped consumer

behaviour and the shopping journey is no different.
Omnichannel retail
Retailers will need to adapt, blending digital and physical
is a necessity
experiences to meet consumers’ demands for a
seamless shopping experience.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 17

TOP FOUR TRENDS SHAPING THE INDUSTRY

The Asian century will reshape the retailing landscape

 Given the vast potential in terms of population Share of Sales Growth by Country
and economic growth, Asia is set to become the 2018-2023
backbone of the world’s economy. The region is
to evolve as the global leader in production with
50% of the world’s production output originating
in the region by 2025.
 By 2050, Asia is expected to account for over half
of global consumer expenditure. Sustained
growth in expenditure will result in growing
consumer markets, especially given China’s
reorientation towards domestic consumption.
 With these favourable factors, the Asia Pacific
region will be driving the bulk of the global
industry’s growth through 2023 and beyond.
China and India are standout performers. China
will account for 25% of the industry’s absolute China USA India South Korea Mexico Others
sales growth over the next five years followed by
the US with 21% of growth. India will be the third Key Point: Asia Pacific continues to see a fast pace
fastest growing market with a 10% share of of economic development, which is fuelling an
growth. For context, South Korea will be the increase in consumer expenditure. In the next five
fourth fastest growing country, but its share of years, three out of the five fastest growing countries
growth is only 4%. will be in Asia.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 18

TOP FOUR TRENDS SHAPING THE INDUSTRY

Connected Consumers will be mobile-first

 Connected Consumers use a variety of devices and Internet Retailing Value Share by Channel
interfaces to connect to the internet, in order to 2018-2023
interact with digital content, services and 100%
experiences. While computers first brought the 90%
internet into the home, mobile, in particular, ushered
80%
in a borderless internet, giving more consumers
instant access to anything, anywhere. 70%

 In 2018, 68% of households had a smartphone and 60%

that will increase to 85% in 2023. Most households 50%
will access the internet for the first time through a
40%
smartphone.
30%
 As access to the mobile internet grows, especially in
emerging markets, mobile internet retailing will reach 20%

a tipping point in 2019 and account for the majority of 10%

internet retailing sales. The share of internet retailing 0%
taking place through a smartphone or tablet will be 2018 2019 2020 2021 2022 2023
52% in 2019. In 2023, the proportion will be 58%. E-commerce M-Commerce
 The rise of internet retailing is also enabling
shoppers to access products from around the world Key Point: The next wave of digital disruption will
while remaining in their homes. As a result, foreign come as more households gain access to the
internet retailing is expected to grow by 115% over internet through their mobile phones. Retailers will
the next five years to reach USD375 billion in 2023. need to reinvent their businesses for a mobile-first
world.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 19

TOP FOUR TRENDS SHAPING THE INDUSTRY

Middle-income consumers want maximum value

Across developed economies, the middle classes Value Sales Growth by Channel
have neither expanded nor enjoyed rising incomes: 2019-2023
 In the decade to 2018, the share of middle-class 9
households shrank slightly from 28.5% to 28.3%
8
across the 32 major developed countries tracked
by Euromonitor; 7

 The 2008-2009 global financial crisis has left a 6

% y-o-y growth
lasting impact on their finances, as the middle
5
classes in most developed countries have not
seen meaningful real gains in purchasing power 4
since 2008. By 2018, median incomes in 13 out of
3
the 32 major developed countries have not even
returned to their pre-crisis levels. 2

 As middle-class consumers focus on acquiring the 1

most for their money and optimising their limited
0
resources, retailers that focus on delivering value, 2019 2020 2021 2022 2023
which is the optimal mix of quality and price, are
Retailing Discounters Variety Stores
likely to do well. Discounters within the grocery
channel and variety stores in the mixed retailers
channel are among the fastest growing retail Key Point: The middle class retreat, especially in
channels and will outpace total retailing sales developed countries, means that retailers with a
growth through 2023. focus on maximising value will do well.

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TOP FOUR TRENDS SHAPING THE INDUSTRY

Omnichannel shopping will become the norm

 Thanks to technology, shoppers are reinventing the Average Share of Shoppers Using
way that they shop. They expect to seamlessly switch Omnichannel Approach 2018
from mobile to in-store to computer to mobile devices 60
as they move through the purchasing process. From
the shopper’s perspective, the expectation is that
50
their shopping experience is the same in any way
they choose to purchase, with the same level of ease,
access to inventory and service across all channels. 40

% share
 Offering an omnichannel experience generally results
in higher sales from the shopper. According to a 30

study by Criteo, globally, omnichannel shoppers only

account for 7% of customers, but generate 27% of 20
sales.
 Euromonitor International conducted an Industry 10
Insights Survey in July 2018 of 525 retail
professionals across 84 countries to understand how 0
many of their customers shopped both online and in Asia Pacific Europe Latin Middle East North
America America
physical stores. Most respondents had some
percentage of customers shopping across channels,
but there are regional differences. Latin America has Key Point: Consumer behaviours and technology
the lowest average penetration of omnichannel with will continue to evolve, and retailers must meet their
only 26%, while North America has the highest with changing expectations when it comes to a seamless
49%. shopping experience.

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 21

INTRODUCTION
GLOBAL OUTLOOK
LEADING COMPANIES AND BRANDS
TOP FOUR TRENDS SHAPING THE INDUSTRY
MARKET SNAPSHOTS
MARKET SNAPSHOTS

Global snapshot of grocery retailers

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 23

MARKET SNAPSHOTS

Global snapshot of non-grocery specialists

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 24

MARKET SNAPSHOTS

Global snapshot of mixed retailers

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 25

MARKET SNAPSHOTS

Global snapshot of non-store retailing

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 26

MARKET SNAPSHOTS

Regional snapshot: Asia Pacific

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 27

MARKET SNAPSHOTS

Regional snapshot: North America

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 28

MARKET SNAPSHOTS

Regional snapshot: Latin America

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 29

MARKET SNAPSHOTS

Regional snapshot: Western Europe

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 30

MARKET SNAPSHOTS

Regional snapshot: Middle East and Africa

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 31

MARKET SNAPSHOTS

Regional snapshot: Eastern Europe

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 32

MARKET SNAPSHOTS

Regional snapshot: Australasia

© Euromonitor International RETAILING GLOBAL INDUSTRY OVERVIEW PASSPORT 33

FOR FURTHER INSIGHT PLEASE CONTACT
Michelle Grant
Head of Retailing
Michelle.grant@euromonitor.com
www.linkedin.com/in/migrant1/
www.twitter/com/EMI_MichelleG
https://www.forbes.com/sites/michellegrant/

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