logo redirect pin user minus plus fax mobile-phone office-phone data envelope globe outlook retail close line-arrow-down solid-triangle-down facebook globe2 google hamburger line-arrow-left solid-triangle-left linkedin wechat play-btn line-arrow-right arrow-right solid-triangle-right search twitter line-arrow-up solid-triangle-up calendar globe-americas globe-apac globe-emea external-link music picture paper pictures play gallery download rss-feed vcard account-loading collection external-link2 internal-link share-link icon-close2
Mainland China
  • Global
  • United States
  • Angola
  • Argentina
  • Australia
  • Austria
  • Bahrain
  • Baltics
  • Belgium
  • Brazil
  • Bulgaria
  • Cambodia
  • Canada
  • Chile
  • Colombia
  • Czech Republic
  • Denmark
  • Egypt
  • Finland
  • France
  • Germany
  • Greece
  • Hong Kong
  • Hungary
  • India
  • Indonesia
  • Ireland
  • Israel
  • Italy
  • Japan
  • Jordan
  • Kazakhstan
  • Kenya
  • Korea
  • Kuwait
  • Latin America
  • Luxembourg
  • Mainland China
  • Malaysia
  • Mexico
  • Morocco
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Pakistan
  • Panama
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Romania
  • Russia
  • Saudi Arabia
  • Singapore
  • Slovakia
  • South Eastern Europe
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Turkey
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Venezuela
  • Vietnam
English
  • English
  • 简体中文
Log In
  • Global Intranet
  • myCBRE
  • Services
    • Business Line
      • Advisory & Transaction Services
      • Capital Markets
      • Global Workplace Solutions
      • Investment Management (CBRE Global Investors)
      • Property Management
      • Valuation & Advisory Services
    • Industries & Specialties
      • Office
      • Industrial & Logistics
      • Retail
      • Residential
      • Urban Development
      • Flexible Workspace
    • Services for Investors
      • Consulting
      • Host
      • International Residential Projects
      • Investment Accounting & Reporting Solutions
      • Leasing & Advisory
      • Valuation & Advisory
    • Services for Occupiers
      • Enterprise Facilities Management
      • Host
      • Leasing & Advisory
      • Occupier Consulting
      • Portfolio Services
      • Project Management
      • Transaction Management
      • Valuation & Advisory
      • Workplace
  • Research & Reports
    • About Research
      China Research Archives
      Asia Pacific Research
      Global Research Gateway
      Global Research Gateway Support
  • People & Offices
    • Leadership Team
  • About CBRE
    • Case Studies
      Coporate Information
      Corporate Responsibility
      Media Center
      Asia Media Centre
      Investor Relations
      Careers

Previous

Press Release
Increasing Enthusiasm Chinese Buyers for Overseas House Purchasing

Next

Press Release
CBRE Group, Inc. Launches Global Brand Positioning – “Build on Advantage”
  • About CBRE
  • Media Centre
  • Rise of Middle Class Leads to Wave Of Retailer Expansion

Rise of Middle Class Leads to Wave Of Retailer Expansion

December 12, 2014
  • Email
  • Share
  • Tweet
  • Share

China in the Top Ten Retail Markets By 2020 Yet With Similar Challenges for Landlords

​December 12, 2014, Beijing – In recent years, the Asia Pacific retail market has boomed on the back of strong economic growth, rapid urbanization and the emergence of a large and prosperous middle class population, CBRE’s latest report The New Age of the Asia Pacific Retail Market reveals. As a result, Asia Pacific is now experiencing an upsurge of new retail construction to meet demand as international retailers flock to the region. 

The report reveals that Asia’s middle class is set to triple by 2020, from 525 million in 2009 to over 1.7 billion. It is forecasted that by 2020, China, India and Indonesia will all be in the top ten global markets for retail consumption demand. 

Hsiang-Yun Chu, Senior Director, Retail Services, CBRE China said, “As the regional population becomes more prosperous, consumer spending will continue to gradually expand from daily necessities to discretionary items such as cars, apparel, fashion accessories and consumer electronics. 

In order to take advantage of this expanding middle class, international retailers, predominantly fast fashion brands, are continuing to enter and expand in the Asia Pacific region at a rapid rate. Despite concerns over the slowdown in economic growth and retail sales, particularly in China, there continues to be an increase in the number of new retail entrants across the region.

Top target markets for new retailer entrants in 2013

 

Source: Retail Hotspots in Asia Pacific, CBRE Research, 2014

Outlook for 2015 – Economies Diverge in Asia Pacific

Overall retailer demand in Asia Pacific is set to remain subdued heading into 2015 but activity and demand levels will diverge across different markets. Jonathan Hsu, Director at CBRE Research, Asia Pacific, says, “Japan and Australia are expected to remain upbeat, whilst activity in India should pick up on the back of relaxation of foreign direct investment in single and multi-brand retail. China, Hong Kong and Singapore will stay relatively quiet due to softening domestic consumption, in addition to Chinese shoppers’ weaker appetite for luxury goods.”

Mr. Hsu notes that international retailers tend toward a strategy of expansion in secondary cities after first establishing their presence in capital or tier I cities. “Key emerging markets in Southeast Asia, such as Hanoi and Ho Chi Minh City in Vietnam and major cities in Indonesia, Malaysia and the Philippines, will be a strong area of focus due to the growing appetite for consumer goods and relaxation of foreign investment regulations next year. The construction of new high quality shopping center supply is providing more options for retailer expansion in these markets,” Mr. Hsu added.

In terms of retailer categories, CBRE expects mass market brands to look towards highly populated markets, primarily China and India, for expansion in 2015. Retailers in the luxury sector will opt to focus on the mature markets of Japan, Singapore and Hong Kong. Bridge brands will concentrate on slightly more mature markets, including Japan and South Korea.

New Strategies for Retail Market Competition

There are challenges ahead for retailers, including rising operational costs, the rapid growth of e-commerce and a more sophisticated and demanding consumer base, contributing to a more competitive market.

Elaborating further on the concerns of retailers, Mr. Chu stated, “Retailers will have to implement higher standards of due diligence, competitor benchmarking and strategic planning as the retailing environment turns increasingly competitive. Retailers are also putting a general focus on portfolio reviews and consolidation, although they’re continuing to display a strong interest for well-established properties and locations in markets with a proven track record.”

“We expect to see flight to quality become a prominent theme for retailers in the region, in terms of finding the right location, the standard of retail facility and sophistication of shopping center management. Retailers will demonstrate a strong preference for well positioned shopping centers operated by experienced landlords with a proven management record, especially when they expand to new areas or markets,” On the concerns of landlords, Mr. Chu noted, “The increased level of competition will be especially visible in the shopping center environment, where landlords will have to utilize a range of strategies in order to ensure they stay relevant and continue to attract shoppers and tenants.”

CBRE’s Report Recommends the Following Strategies to Ensure Landlord’s Success:

  • Collaborate with Tenants – Landlords should strive to understand the target customers of their existing or potential tenants, incorporating their tenants’ business objectives into the overall development strategy. Personalizing the retail experience by offering unique retail concepts, tailor-made products and themed promotional events can enhance consumer awareness.
  • Embrace ‘Retail-tainment’ – Landlords need to be more proactive in managing their tenant mix, and refreshing their offering to consumers by incorporating more ‘experiential’ elements such as food courts, cinemas, ice-skating rinks, bowling alleys, children’s playgrounds and pet parks, in addition to offering events, performances and exhibitions.
  • Understand the Consumer – According to CBRE’s recent consumer survey, consumers have high expectations for the overall shopping experience, valuing convenience, price, cleanliness and security as most important; landlords should tailor retail venues to match these preferences.
  • Leverage Big Data – Big data can measure and track levels of consumer engagement; with many social media platforms providing data that can track “likes” and “check-ins”, landlords should use existing data provided by consumers to formulate a more tailored strategy to enhance their overall shopping experience.

  

 

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.​

​​

Media Contacts

Jamie-Feng_326x248
Jamie Feng
Manager
China
Marketing & Communications
+86 21 2401 1272
+86 139 1785 0201
  • Corporate Information
  • Corporate Responsibility
  • Case Studies
  • Media Centre
  • About Us
  • Careers
  • People & Offices
  • Leadership Team
  • Investor Relations
  • Contact Us
  • Global Web Privacy and Cookie Policy
  • Sitemap
  • Disclaimer
  • Terms of Use
  • LinkedIn
  • Twitter
  • Facebook
  • Youtube
  • Instagram
  • Wechat
  • Weibo