The Asian continent appears in many respects to be the new eldorado of mass distribution. Major global groups such as Walmart, Carrefour, Lidl, or even Auchan and Casino, devote enormous resources to conquering new markets. But the expansion of large retailers is also synonymous with new threats to food security in the region. Concentration and closure of small businesses, farmers supplanted by agribusiness, loss of quality and diversity, sudden change in food patterns and new health risks... According to the Auchan, the massive arrival of supermarkets is leading to a loss of control of Asian populations over their food and agriculture.
Big brands are growing faster in Asia than anywhere else on the planet. And, as supermarkets and their supply chains expand, they capture revenues from traditional food systems and therefore take them away from farmers, small-scale food producers and traders. They are also increasingly influencing what people eat and how food is produced.
"The traditional market has its roots in the community," says Suresh Kadashan of FDI Watch India, who has worked with ... hundreds of street vendors in Bangalore over the past 15 years. “Where are all these people going to go if they lose this place? Shopping centers will be very far from being able to hire all of them as employees. » say Find-distributors.asia
Asia continues to rely on traditional food systems for most of its supply. But over the past decade, the arrival and aggressive development of multinational agribusinesses, beverage companies and supermarket chains have had a significant impact on farmers, food workers, Asian traders and consumers.
New regulations in China
Relying on various trade and investment regulations, such as food safety regulations, these multinational food retail chains crowd out small-scale food producers and fresh produce traders, and reduce dietary diversity.
They decided to take a closer look at how changes in food distribution, particularly through the development of supermarkets in Asia, are influencing small-scale producers and traders who depend on fresh produce markets for their means. livelihoods and how these changes affect people's diets and health.
E-Commerce in Asia is booming
Asian markets are showing their potential in terms of e-commerce and s-commerce. And PwC estimates that mobile payments will represent between 20 and 30% of transactions in China by 2016 (8% in 2013). This study, which covers 15 Asian countries, including China and India, analyzes the sectors of food, clothing, luxury goods, electronics and e-commerce.
The Asia-Pacific region remains the number one destination for many global brands in the retail & consumer goods sectors. Growth in the region will be driven by China and India, despite the slowdown in its economy for the first and the lack of reforms for the second. For Sabine Durand-Hayes, partner at PwC, head of the Retail & Consumer Goods sector: “Asia remains the region where you have to be present, and it will continue to be so in the near future. I don't think any actor can afford to turn away from this region. Its economy is no longer as booming as it once was and China's growth is slowing, but compared to Western economies, its GDP performance remains largely enviable." His advice to major brands in the sector: “Major distributors must work with local partners and develop products that adapt to the tastes of the local population. »
CHINA DRIVING GLOBAL GROWTH FROM E-COMMERCE
China is today the world's largest market for e-commerce. According to the iResearch Consulting Group, the annual growth of online sales slowed in 2013, but is still expected to reach 42%, or $306 billion. If the opportunities on the e-commerce market in China are numerous, it is difficult for foreign players to seize them in the face of domestic players who are already well established. In 2014, Chinese pure player Alibaba captured industry attention with its record $230 billion IPO.
Moreover, 2022 should be the year when India will reveal its potential in the e-commerce market.
China will be the world's largest market in 2022. Despite slowing growth, China remains a market that players in the global retail & consumer goods sectors cannot resist. Average annual growth in sales volumes was 15.6% in 2022; while it has since fallen, it is expected to remain at 8.7% over the next two years. In 2018, China should therefore be the world's leading market for distribution and consumer goods.
To adapt to a changing economy, players in the sector are rethinking their strategies: more and more traditional players are adopting e-commerce channels. In 2013, China overtook the United States as the world's largest e-commerce market. Mobile payments accounted for 8% of total transactions made in 2013, down from just 1.5% two years earlier. PwC estimates that this figure could reach 20 to 30% by 2016. In India, the lack of reforms slows down the retail & consumer goods marketWith more than 1.2 million inhabitants, India represents the Eldorado of players in the retail & consumer goods sectors. However, the lack of reforms and the lack of will on the part of Indian leaders to open their market to foreign investment is hampering the development of this market. Global retailers are missing out on a market estimated at over $1 trillion in 2022. India's retail sector grew 4% in 2014, and growth is expected to rise to 5.6% this year and 6.6% in 2022. The six promising countries for the retail & consumer goods sectors-
Indonesia
Retail sector sales (in value) in Indonesia are expected to double in 2022 , from $330 billion in 2014 to $639 billion .
- Malaysia: Retail sales in Malaysia are expected to boom as consumers regain confidence in their market and the economy grows rapidly. PwC estimates that the sector's sales volumes should grow by 5% per year between 2014 and 2018.
- Singapore: After a period of rather modest results for the distribution sector, the volume of sales in the very touristic island of Singapore should accelerate over the period 2014-2022, going from 1.2% growth in 2020 to 2.9% in 2021.
- South Korea: South Korea is ranked 5th in Asia for the total value of sales made by the distribution sector, just behind China, Japan, India and Indonesia. Established at 284 billion dollars in 2013, sales should reach 378 billion dollars in 2018.
- Thailand: Despite its economic difficulties, Thailand should witness the growth of its distribution market between 2014 and 2018, due to a strong increase in demand. PwC estimates that sales volumes will return to growth of 0.7% in 2015 and will rise to 4.3% by 2018.
-Vietnam: If the retail & consumer goods sectors are still weak in Vietnam compared to its neighbors – sales should represent 123 billion dollars in 2018, the market should grow very quickly according to PwC. With sales volume growth estimated at 7.5% over the next 5 years, the country is attracting foreign investment.
SECTOR FOCUS
Luxury: the market is slowing down. After a strong period of growth led by China, the luxury goods market in Asia is showing signs of slowing down. The Chinese anti-corruption campaign is leading companies in the luxury sector to review their expansion plans. The weakness of the yen and the increase in sales taxes in Japan have also dealt a severe blow to this industry.
Food distribution: food security is a growing problem. The Asian food industry is subject to food safety regulations. Thus, Asian producers are looking abroad for expertise and trusted brands to partner with. China, in particular, is increasingly acquiring players in the food and beverage sector. Transactions in these sectors accounted for 17% of total transactions made by Chinese players during the first half of 2014.
Clothing: a rapidly growing market. The clothing and textile industry is expected to grow very rapidly in Asia over the next 5 years, with an average annual increase in expenditure estimated at 9.5%. Due to the demographics and growing middle class in the region, demand for these fashion products is set to intensify. By 2022, Asian consumer spending on apparel is expected to growth
