Exclusive extracts from this 99-page-long report:
- What is the business?
The overall retail sector includes several types of players, but a broad distinction can be made between outlet-based players and online retailers, as well as between specialised and diversified players. While the distinction between brick-and-mortar and e-commerce players has become blurred, with both types of retailers opting for online-offline integration, leading mass-market retailers worldwide continue to rely extensively on brick-and-mortar operations. They are the focus of this report. Mass-market retailers' main offerings comprise food and other perishable goods, as well as specialty lines such as electronics, clothing, cosmetics, etc., in addition to various types of services (banking, telecom, insurance, mobile payments). […]
- What are the main markets?
As the balance between online and in-store retail has shifted, traditional retailers have been pouring billions into online businesses. They are looking to challenge the dominance of Amazon as well as regional players such as Alibaba and JD.com in China, Flipkart in India, and Mercado Libre in Brazil. Walmart, for instance, has purchased US e-commerce player, Jet.com, and India's largest e-commerce group, Flipkart, and has tied-up a partnership with JD.com in China. Other major partnerships designed to catapult brick-and-mortar retailers into the online space have been inked between Carrefour and Google (focused on France) as well as Auchan and China's e-commerce giant, Alibaba, which also owns Lazada, the leading e-commerce platform in SE Asia. [...]
- How intense is competition?
The retail landscape is highly competitive, as highlighted by leading players' low profitability. Competition takes places at a local/regional level, with multinational retail chains battling small-scale local actors or mom-and-pop stores (particularly in emerging economies) in most markets. Competition is spurred by market maturity in industrialised countries and overall consumer price sensitivity. Whether it is for premium or basic products, buyers increasingly compare prices online. Price competition is underscored by a recent wave of purchasing tie-ups among major retailers (e.g. Carrefour-Tesco; Metro, Auchan and Casino Group; etc.). The effects of scale are important and are linked to higher profit margins (as is the case for Walmart). [...]