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Our Bureau

Chennai , Oct. 13

SEVEN countries — China, India, Turkey, Vietnam, Russia, Romania and Bulgaria — offer the strongest investment opportunities for retail and consumer companies, according to the fourth edition of PricewaterhouseCoopers' Retail and Consumer study titled From Beijing to Budapest: Winning Brands, Winning Formats.

Of the seven priorities, Russia, Romania and Bulgaria joined the list for the first time. The report says that while achieving a presence in these transitional markets can be challenging, companies that develop new products and formats tuned to the quickly evolving tastes of customers will be successful.

"Adopting a policy of expansion into one or several of the high-growth markets is a strategic must for retail and consumer companies," said Mr Jacques-Etienne de T'Serclaes, PricewaterhouseCoopers Global Retail and Consumer Leader. "To succeed in transitional economies, companies must consider the specific challenges they face in expanding before realising the opportunities that lie ahead."

Twenty countries with the highest growth potential are included in the report: China, India, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam, Bulgaria, Czech Republic, Hungary, Lithuania, Poland, Romania, Russia, Slovak Republic, Slovenia and Turkey. The emerging markets (particularly China, and India) demonstrate the growing perspectives for strong international development in these regions. Hypermarkets, discount stores and specialised outlets are the main formats dominating the retail scene in both regions covered by the report.

The PwC report says that for both new and foreign entrants and for investors who want to consolidate their operations in these markets, partnering with local firms remains the most viable strategic option. One of the most significant management challenges is that of recruiting and retaining good staff. A key finding is how entering these markets requires foreign retail and consumer companies to create new products and new formats geared to the consumers. Successful development of brands in the transitional economies lies in finding the right balance, blend and mix of products, the report says, mentioning the importance of being sensitive to local tastes.

Extreme price sensitivity at one end of the market, and a move towards higher-priced products at the other is leading to market polarisation. Therefore, premium brands, private label and value low-price labels are all being developed equally successfully, the PwC report says.

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