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The Brazil-Russia-India-China-South-Africa grouping known as BRICS has become an important political force in the global trading system as well as a key WTO influencer. 10 years on from their first summit in Russia, we look at how far they have progressed in terms of retail growth. Are they thriving in retail, and what can we learn from that?
Representing almost half of the world’s online shoppers, the BRICS markets are ones to be watched, collectively and individually, in terms of retail trends. Online sales in the BRICS countries are predicted to rocket to 59% (US$ 3 trillion) of the global total by 2022.
With China part of the group, it’s obvious to see where the huge numbers are coming from, as China is poised to become the world’s largest single retail market in 2019, overtaking the United States, with e-commerce the driving factor, its key player remaining Alibaba, followed by Pinduoduo. Growth rates are in fact slowing in the Chinese domestic market, but China is fully predicted to out-pace the US’s growth into 2022.
Russia, meanwhile, is a significant player in terms of cross-border e-commerce, while its domestic retail market is set to face challenges this year due to a 2% VAT increase in January. The sportswear sector is growing rapidly, although sports retailers need an estimated 70 to 80 mono-brand stores across Russia to be competitive.
Brazil and South Africa are rapidly increasing their respective shares of the BRICS retail market. Brazilian retail had its biggest growth in five years in 2018, with personal items, food products and I.T. (including phones) among the best-performing areas. Since a curbing of inflation, the Brazilian economy in general has been recovering well after a long recession.
Retail in India now represents over 10% of the country’s GDP and around 8% of employment, with India the fifth largest global destination in the retail space. Further growth is predicted thanks in part to urbanization and a burgeoning middle class with their resulting lifestyle and spending changes leading to a rapidly rising demand for consumer electronics and household appliances.
BRICS will remain a group for close observation – both as a group, and as five independent retail economies.
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