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Retailers Look to Emerging Markets for Continued Growth

The National Retail Federation wrapped up its 100th annual convention Wednesday in New York City.

The National Retail Federation wrapped up its 100th annual convention Wednesday in New York City. The association is the world’s largest retail trade group with members in 45 countries, including 1.5 million companies in the United States.

More than 18,000 retail professionals from 500 companies worldwide packed this year's National Retail Convention, billed as the "Big Show", in New York.

And Ira Kalish, director of global economics at the Deloitte consulting firm, told delegates to expect slower growth in the United States over the next decade, but increased business in China and such emerging markets as Vietnam, Indonesia, Turkey, Egypt, South Africa and Colombia.

“In those countries, we will see a rapid rise in the middle class, and that has huge implications for global retailers and their suppliers,” Kalish said. “And if governments fail to support the transition with appropriate policies, then we’re likely to see economic crises, and that is one of the risks we face in the coming decade.”

Tony Galli, managing director of VICS, an association that seeks to increase supply efficiency in the retail industry, says a good sign of a growing economy is a second family car in high growth countries such as Brazil. “The same is true for the ability to entertain themselves - home entertainment - looking for vacation getaways, that sort of thing; all the spending that is associated with a more affluent family,” he said.

A prime concern for retailers is the security of employees, inventory and investments. Jacques Behr, an executive with the French electronic payment company Ingenico, says emerging countries seeking stable economic growth must guarantee security.

“If you say security, it means that foreign investors are not eager to come so easily,” Behr stated. “So it needs to be stabilized first, so that foreign investors can come to these countries and develop retail structures and retail networks.”

Kalish says countries with younger demographics particularly in the Middle East, Africa and India, will likely draw retailers over the next decade. Behr agrees, adding that literacy levels and honest judicial systems are important elements of growth. He says the single most important factor in retail and payments is the intangible of trust; the feeling that neither the buyer nor the seller will be cheated in commerce.