Multinational Retail Chains & the China Opportunity

With the markets in North America and Western Europe approaching saturation, multinational companies (MNCs) are looking toward developing and emerging markets to spur future growth.

These markets account for 84% of the global population¹ and are estimated to spend US$ 23 trillion dollars annually on consumer goods alone.

However, while they provide a huge opportunity to MNCs, the companies trying to tap these markets have met with mixed results. This is because these MNCs have often failed to understand the realities of operating in these markets.

In addition to intense competition and increasing saturation of the market in their home country and traditional markets in the West, these MNCs have had to contend with factors such as a slowdown in the economy, change in consumer behavior as a result of the pricing environment², limited space for expansion, etc.

In contrast, the retail industry in many developing and emerging markets is witnessing a boom.

These markets are in their initial phases of development and have provided the MNC retail chains with enough scope for growth for a long time to come.