| BERLIN, Sept 27
BERLIN, Sept 27 Africa is starting to appear on
the radar screens of western retailers as they look for the next
growth opportunity in emerging markets while having to cope with
subdued consumer spending at home.
Consultants Deloitte and Planet Retail on Tuesday identified
five African countries -- Algeria, Kenya, Morocco, Nigeria and
South Africa -- as being among the 10 new markets most likely to
appeal to multinational store groups in the coming years.
"All have fast-growing economies, young and growing
populations, and fragmented retail sectors," Deloitte and Planet
Retail said in a report published on the second day of the World
Retail Congress in Berlin.
"Moreover, although traditional forms of retailing are still
dominant, a growing middle class is demanding branded products
and the opportunity to shop in modern retail formats," they
Africa was thrust into the retail limelight this year when
U.S. retail giant Wal-Mart bought a majority stake in
South Africa's Massmart, giving it a foothold in the continent's
biggest economy and a presence in some 13 other African markets,
ranging from Botswana to Zambia.
"With the world's largest retailer now active in the
continent it seems likely other leading global retailers will
investigate opportunities in the region," said Ira Kalish,
Deloitte's director of global research.
Faced with limited population growth and sluggish economies
at home, many U.S. and particularly European retailers have been
expanding into emerging markets in the hope of finding growth
opportunities but with competition intense in China and Brazil
many are looking elsewhere to gain an advantage.
This year, for example, Belgium's Delhaize bought Serbian
retailer Delta Maxi Group, while Germany's Metro is
expanding in Pakistan -- two countries also tipped in the report
as likely to attract more attention among international chains
in coming years.
As most Africans are on low incomes and focused on basic
needs, grocers such as France's Carrefour and Auchan
and Britain's Tesco are set to be the first movers.
Other brands, particularly those focused on clothing and
footwear, could quickly follow.
John McCarvel, chief executive of footwear company Crocs
, told Reuters that Africa was potentially an attractive
region, not least because its trademark plastic clogs are well
suited to the hot climate.
However, he said the marketplaces in much of the region were
small and the company was focusing in the short term on
expanding in Asia and filling out gaps in Europe.
"Africa is the final frontier in retailing," said John
Fraser, an executive at South African store group Woolworths
, which this month outlined plans to more than double
its presence in Africa over three years.
He cautioned it was a long-term investment, though, and with
few strong local players in many countries, new entrants might
have to seek partners from outside the sector, meaning it would
take longer to establish themselves.
While a weak banking infrastructure may deter some retailers
from Africa, it could be an opportunity for those prepared to
offer their own financial services, which can boost customer
loyalty and give an advantage over rivals when it comes to
larger purchases, he added.
Deloitte and Planet Retail also identified Kazakhstan, Peru
and Vietnam as markets with a high potential.
(Editing by Greg Mahlich)