PwC’s Growth Markets Centre - & Consumer Update

Global Market Size (US$ trillion) Key global trends Regional / Country Updates APAC • Ultra convenience: Quick and CAGR convenient ‘push-button’ products and • Indonesia: JD.com opened JD.ID X-Mart, an AI-powered 5.8% services like Dash Buttons or via store, in Jakarta this August. It is the group’s first unmanned convenience store to be opened overseas. Since launching its 10.7 11.3 11.9 12.7 Siri or Alexa are rising in popularity. first AI-powered store in Beijing last October, JD has opened • Micro-shopping: Micro-shopping trips over 20 X-Mart stores in China. (< 5 minutes) are becoming increasingly • India: Swedish retailer IKEA enters the Indian market, 2016 2017 2018F 2019F common thanks to ‘click n collect ’grocery Source: Euromonitor launching its first store in Hyderabad in August. The retailer services. In the US, micro-shopping grew is also planning to enter the Latin American market by 2020. 8.7% at Whole Foods stores after Amazon Global Consumer Goods Output acquired the grocery chain in Aug 2017. • Southeast Asia: Retailers across the region are investing in (US$ trillion) digital engagement to get closer to consumers. Earlier in • Customized Environment: Customers 2018, Bata secured a partnership with a Singaporean CAGR today are yearning for a unique retail software company, Capillary Technologies, to strengthen 3.3% experience and are ready to reward their omni-channel customer relationship management 11.9 12.3 12.7 13.1 retailers which provide them. This will (CRM) strategies in Philippines and Vietnam. require a significant change in the staff Americas numbers and skills for physical retailers. • US: The retail industry is expected to save $175 billion due Online players will need to consider 2015 2016 2017 2018F to the reduction in the corporate tax rate. Although still early having a physical environment where that Source: Oxford Economics experience can be realized effectively. to gauge the full effect, some retailers such as CVS Health and have already announced investments in • Smarter stores: The physical retail response to the tax cut. Key M&A / Expansion activity store will continue to evolve into smarter • Brazil: Walmart retreats from the Brazilian market after its environments. Brands will move towards th • Aug 2018: Walmart paid $16bn for a 7 year of losses in the country. It sold most of its Brazilian truly incorporating technologies such as 77% stake in Flipkart, in one of the branches to investment group Advent International – part of AI and VR to create a connected store. world’s largest e-commerce deals. its strategy to focus on growing markets. Consumer data will lead to a more EMEA • Aug 2018: Heineken acquired a 40% personalized understanding of customers stake in Beer Holdings, (‘cognitive commerce’), and warehouse • Europe: Online sales in Europe are growing 10x faster than China’s largest brewer and owner of the logistics teams will operate more the overall retail market. Online sales are expected to grow world’s largest beer brand, Snow Beer. effectively in accordance. at an average of 11.9% p.a. over the next 5 years in Western • July 2018: Amazon acquired PillPack, a Europe with 21% of non-grocery sales being online by 2022. • Payments with wearables: The US online pharmacy, thereby entering • Middle East: The UAE is expected to welcome around continuous rise in mobile connectivity has the pharmacy business. 1,184,000 sqm of new retail space by the end of 2018. The led to the proliferation of digital $1.2bn mall on the Palm Jumeriah is 85% complete, while • April 2018: ASDA and Sainsbury payments, with Visa helping to offer more the world’s first nature-inspired mall, Cityland Mall, has agreed to merge in a deal worth $10bn ways to pay through devices such as confirmed its launch date for Q4 2018. which, if approved, would make it the phones, watches and now fitness trackers largest retailer in UK, ahead of . with the new Fitbit Ionic – no physical • Africa: M&A activity in 2018-2019 is expected to increase in • March 2018: Nordstrom announced wallet required. the region by an average of $6.5bn, in line with middle class the acquisition of two digital retail start- growth in countries such as Ghana and Tanzania, and ups, BevyUp and MessageYes. increasing demand for foreign brands and online retail.

Sources: BMI, Euromonitor, CNBC, Global Retail News, Forbes, Retail in Asia, Arabian Business, Forrester, Retail August 2018 Detail, My Total Retail,