Taipei – Asia Pacific-based retailers value expansion within their own region rather than cross-regional expansion, due to the significant opportunity which still presents itself in their home region, according to CBRE’s ninth edition of its How Global is the Business of Retail? report.
In 2015, 32% of APAC-based retailers entered new markets within their own region—up from 23% the previous year—with Hong Kong, Singapore and Taiwan as the top three targeted countries. In regards to new international entrants, overall global cross-border retailer activity grew modestly in 2015 with the number of new entrants at city level up by 3.1%.
Hong Kong was the top market globally in 2015 attracting 73 new international retail brands, up from 58 in 2014. Singapore follows a close second attracting 63 new brands, whilst last year’s top market, Tokyo, slid to third place. Taipei was fourth with 47 new entrants and Beijing came in eighth with 37 new entrants. Seoul (26 new entrants), Jakarta (24), Manila (24), New Delhi (23) and Bangkok (23) also featured in the top twenty.
Top Target Markets by Number of New Entrants
| 2015 Ranking | Market | No. of New Entrants |
|---|---|---|
| 1 | Hong Kong | 73 |
| 2 | Singapore | 63 |
| 3 | Tokyo | 57 |
| 4 | Taipei | 47 |
| 5 | Moscow | 40 |
| 6 | London | 39 |
| 7 | Dubai | 38 |
| 8 | Beijing | 37 |
| 9 | Bucharest | 35 |
| 10 | Doha | 29 |
New brands are increasingly targeting tried and tested locations. For them to gain a ‘stamp of approval’ for their brand, it is essential to have a store in major cities such as Hong Kong and Singapore, the report says. Fundamental drivers such as demographic growth, urbanization, and increasing household incomes will continue to provide continuous demand and great potential in the region.
Taipei’s retail sector has gained more traction over the past few years on the back of sustainable demand from international retailers, as the market remained relatively underpenetrated than other developed countries in the region. Fast fashion brands active with new entrants included H&M, Forever 21 and SPAO, etc. “Tight availability of retail space on the main shopping streets continued to hinder leasing transactions and thus more new brands opted for shopping centres,” says Joseph Lin, Managing Director of CBRE Taiwan.
Retail expansion within APAC has been focused around Food & Beverage (F&B)—accounting for one third (33%) of expansion—with robust activity by Japanese, Korean and Taiwanese brands. Since consumers in Asia Pacific tend to dine out and socialize out-of-their-home more, the F&B sector is progressively evolving to cater to the region’s eating and spending habits by offering a diverse mix of options. As shopping destinations in Asia look to diversify their tenant mix and attract more footfall, they have been increasingly looking to F&B retailers to bring in the crowds riding on the strong consumer demand for experience retail.
“F&B retailing
has become a much more significant factor in the overall shopping experience
and landlords are increasingly considering, if not already incorporating, more
F&B into their schemes. F&B can be used as a pull factor to draw
consumers into shopping destinations or to increase dwell time and is becoming
increasingly important in creating shopping destinations,” says Dories Lu,
Director of Advisory & Transactions of CBRE Taiwan.
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