Retail Industry Global Report - 2010: An Imap

An IMAP RETAIL Report
Retail Industry Global Report 2010
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RETAIL INDUSTRY GLOBAL REPORT 2010
Contents
2010 witnesses contraction in retail M&A activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Change in consumer preference fuels online retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Convenience, value and selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Increase in global online population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Localization strategy supports online retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Transformation in online retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Smart shopping and smart-store theme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Multi-channel retail emerging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Web influence on total retail sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Financial analytics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Cross-border online purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Social media takes retailers to social networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Quick growth through globalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Major hurdles to globalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Mobile Commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Online grocery shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Online healthcare. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
H TInvestment opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 O
Future outlook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Statistical reference (Appendices) Appendix A: Global overview of retail and online retail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-i Appendix B: Summary of M&A transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-i Appendix C: Growth drivers of online retail industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-i Appendix D: Niche focus areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-i
An IMAP RETAIL Report
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IMAPs Retail Industry Global Report 2010: Page 1
2010 witnesses contraction in retail M&A activity

There were 1,409 transactions valued at $17.1 billion USD in the last twelve months (ended September 2010) for the retail sector, representing a downside of 33.6 percent in terms of transaction value ($25.7 billion USD during the previous 12-month period with 1,473 deals). Dollar volume in this period included two major transactions (Kohlberg Kravis Roberts/Pets at Home and Lotte Shopping Co/GS Square and GS Mart), which represented $2.7 billion USD or nearly 15.8 percent of total dollar volume. During the previous period, the largest transaction was the acquisition of Next Rx LLC by Express Scripts for $3.5 billion USD. In terms of business segments, specialty and distributors accounted for the highest in terms of value at nearly 56 percent of total dollar volume for the period. In terms of geography, the United Kingdom had the highest transaction value of $3.9 billion USD with a total of 161 transactions over the last 12 months. The United States came in second with a value of $3.4 billion USD through 370 transactions. Among other regions, Europe was the clear leader at $7.3 billion USD with 688 transactions. Going forward, large grocers and mass merchants will start looking to invest in emerging markets, especially in the BRIC1 region, where valuations are low. Also, the retail sector is highly fragmented; hence, consolidation through inorganic growth by foreign players will drive the M&A segment. Albeit, considering the dim retail industry outlook, retail companies will continue to find it hard to raise the funds to finance transactions.
1 Brazil, Russia, India and China countries
M&A Activities at a Glance

2010 V. 2009
Transaction value (USD billion) Top 5 transactions LTM ended 3Q 2009 25.7 32.4% LTM ended 3Q 2010 17.1 27.3%
Segment Analysis
Segment Specialty Stores Distributors Department Stores General Merchandise Stores Home Furnishing Retail Internet Retail Top 5 regions Europe North America Asia Pacific Latin America Middle East Top 5 countries United Kingdom United States South Korea France China No. of transactions 299 692 50 28 38 124 No. of transactions 688 412 245 36 13 No. of transactions 161 370 3 87 66 Value (USD bn) 5.1 4.5 2.4 1.6 1.1 0.8 Value (USD bn) 7.3 4.1 4.1 1.4 0.2 Value (USD mn) 3.9 3.4 1.2 1.1 0.9
Source: Capital IQ Database, IMAP
Global recession hit retail hard

The recessionary period has been a chaotic period for the global retail industry. Factors which affect retail sales such as peoples purchasing ability (disposable income) and willingness to spend (consumer confidence) were at rock bottom during this period. Eventually, global retail sales declined 3.7 percent in 2009 to $13.9 trillion USD1. While sales for 2009 were low, it is worth noting that sales of the global retail industry have doubled since 2003. Along with sales decline, profitability for most retailers shrunk due to heavy promotional expenses incurred in 2009. Profitability of the 200 largest retailers in the world fell to 2.44.1 percent during fiscal ended 2009, wherein
1 Economist Intelligence Unit (EIU)
more than 30 retailers reported operating losses2. This trend affected almost every retail category and geographical area except Africa and the Middle East where retailers reported an increase in profitability. With the worst behind, 2010 began with guarded optimism following signs of a recovery in the global retail sector during the second half of 2009. It is certain that a recovery is on the way; however, the worst-ever recession has changed the industrys dynamics with the changing nature of consumers and their shopping habits.
2 Bloomberg
Change in consumer preference fuels online retail

Even as sales through traditional channels declined, online retail formats provided some respite for retailers as global online retail sales grew by 14.5 percent in 2009 to reach $348.6 billion USD1. Electronics was the largest segment in global online retail sales, contributing around 22.6 percent. While the online retail sales sector continues to outperform, its magnitude remains small with 2.5 percent of total global retail sales. On an average basis, globally, online sales account for 6.6 percent of total sales for the top 100 retailers in 20092. The US remains the biggest market for online retail with 37.2 percent market share. Total spending reached $129.8 billion USD in 20093, marginally lower than $130.1 billion USD in 2008. A high level of product differentiation together with low fixed costs and dynamic market revenue growth is seen in the US market. However, it also creates competition in the market with a large number of active players and the absence of consumer switching costs. The online channel is outperforming wider retail as it has a number of counter-recessionary characteristics. The online channel offers considerable benefits to retailers. Relatively low operating costs (compared to an equivalent store network)
1 Data monitor, July 2010. The online retail market consists of the total revenues generated through the sale of retail goods via online channels, valued at retail selling price. 2 Forrester Research, January 2010 3 The US Department of Commerce
Traditional vs. Online Retail Industry Growth

25% 20% 15% 10% 5% 0% -5% 2006 2007 2008
7.2% 10.9% 12.4% 14.5% 22.7% 22.1%
Traditional Retail Growth Online Retail Growth
9.4%
-3.7%
2009
Source: EIU, Datamonitor, IMAP
allows them to pass benefits to customers in terms of low cost, and can be operated 24x7. The rise in Internet penetration and a change in view of consumer mindsets is happening as more consumers feel more comfortable purchasing and using their credit cards online. In summary, the Internet has evolved into an important retail channel. An increase in tech-savvy consumers, an increase in Internet access and growing confidence in payment security and privacy have advanced this retail channel.
Convenience, value and selection major catalyst for online channel uptake
The online retail channel has consistently outperformed because most consumers are valuing low and transparent prices, convenience, and comprehensive assortment of goods and services. As per the survey4 conducted in North America which is the largest market for online retail, 67 percent of online buyers find the products online that they cannot find in stores easily; 65 percent of US-based Web buyers buy the products online as they save time by shopping online; and 63 percent of Web buyers find better deals online.
4 North American Technographics Retail Online Survey, Q3 2009
Businesses such as Dwell Retail in the UK have experienced dramatic growth in the largely traditional home furnishing sector, as a result of their multi-channel offer to consumers attracted by the ability to try in store buy online large item furniture with next day and timed delivery.
Marc Gillespie, Head of IMAPs Retail Industry Group, IMAP UK (Clearwater Corporate Finance)
Increase in global online population promotes online retail spending

Between 2005 and 2009, the global Internet population increased from 1 billion to more than 1.6 billion and by 2014 it is projected to grow by another 42 percent, reaching a level of 2.3 billion1. Most of the growth in online population is expected to come from the Asia Pacific, Middle East and Africa, which had very low Internet penetration levels of 19.7 percent as of June 2010. These regions will represent 54.9 percent of the online population in 2014, whereas North America and Europe will represent 34.1 percent. Other emerging Asian countries such as Vietnam and Indonesia are expected to have nearly 10 percent of global online users by 2014, but Apple is the only online retailer in the US which operates a transactional Web site for these countries.
i.e. Web sites with local languages along with regional customs even if with a small amount of content at first. These retailers are better equipped to take the advantage of an increasingly diverse global online user base than their counterparts with English-only Web sites. It is worth noting that there is a strong preference for locallanguage content in European markets such as France, while more than 95 percent of online users indicate a preference for local-language content in Asian markets such as Japan and Korea2. Even though localization strategy is being adopted by the global retailers, a lot still needs to be done. For example, while 5 percent of the global population speaks Arabic, just 1 percent of online content is estimated to be available in the language. Similar to local language preference, customer behavior and expectations also vary across countries. More customized online strategy is required for the regions such as the Middle East or Latin America. Indeed, companies have started operating localization initiatives such as IP mapping techniques to localize prices, directing customers to local stores with products on display in the local language and having a local office in the country. Strategies of localizing content and understanding online customer behavior and preference are likely to boost online sales. With all these inhibitors, in the long run, the keen interest in the Web in the post-recession economy and the growth spurt in Web-related technology will continue to drive the growth of the online retail segment, subject to the online business innovations by e-retailers. With its clear price advantage over the bricks-and-mortar channel, online retail will become more attractive to recession-hit shoppers. By 2014, global online retail sales are expected to be $778.6 billion USD3, increasing at a CAGR of 22.2 percent. The major regions such as US and Western Europe are forecast to reach $248.7 billion USD and $158.5 billion USD by 2014, respectively4.
2 Asia Pacific Technographics Survey, Q4 2009 3 Data monitor, July 2010 4 Forrester Research, March 2010
Global Online Population

Region
North America Europe Asia Pacific
2009
259 415 645 178 135
2010
266 475 846 204 173
2012E
292 500 1,033 255 241
Latin America and Caribbean

Middle East and Africa
Total
1,632
1,964
2,321
Source: Forrester Research Inc. and Internetworldstats.com, June 2010
While Internet penetration growth does not show a direct relationship with online retail market growth, online retail market dynamics will change as the global Internet penetration changes, boosting international expansion for most retailers. Also, the level of adoption of online shopping does not always reflect the level of online spending. For example, North America has one of the highest online spending rates per person, while the overall penetration of online buyers is relatively low compared with other markets. Along similar lines, Asian e-commerce giants such as Japan and South Korea are climbing the levels in online spending because of improved access through technology and wider selection of online stores. Altogether, the market potential is huge with increasing Internet penetration levels.
Along with penetration, localization strategy also supports online retail

Traditionally, there was a tendency among online retailers in terms of not changing content according to local requirements and languages. This strategy had its disadvantages in terms of repelling customers who were not comfortable with the English language and standard layout across the globe. It catered largely to English-speaking markets. Today, however, online retailers are adopting the strategy of "localization",
1 Forrester Research, September 2010
Transformation in online retail

Post recession, online retail industry has undergone a fundamental shift in the way it performs and operates. Developments such as smart shopping and smart store, multichannel retail, financial analytics in e-commerce, cross-border online purchases, influence of social media on retailers and globalization in non-US markets have all changed online retail. also tapping into emerging technologies such as radio frequency identification (RFID) tags and virtual shopping, in which consumers "shop" in a simulated store online and record displays that capture their attention. The combination of traditional and emerging research approaches is giving companies a better perspective of shoppers behavior.
New Developments in E-commerce

Social Computing Globalization Multiple Business Models Multiple Channels Enterprise Integration Product Discovery RIAs Optimization
Source: IEA and IPCC, IMAP
Multi-channel retail emerging bricks, clicks and catalogs are creating synergies
Along with the smart-store concept, on the retail format front, most retailers have started adopting multi-format strategies, i.e., along with traditional retail stores, establishing online stores, catalogs, mobile stores and convenience stores to gain a competitive edge and expand their customer base. With slowing demand, retailers are inevitably finding themselves having to compete much harder against their rivals to achieve previously accustomed levels of growth. With the market maturing and customer penetration level saturating, targeting the right customer becomes essential. Also, new players such as Gap, Zara and H&M in the market will further increase the competition. At present, multi-channel retailers are outperforming their pure-play rivals, as they are able to provide greater convenience through services such as "click & collect" along with strong brand affiliation.
Multiple Devices User-generated Content
Todays E-commerce Solutions
More & Rich Content Personalization Saas Point Solutions Data, More Data
Post recession, consumers believe in smart shopping and smart-store theme

Since the recession, consumers have changed their buying habits dramatically. According to a survey on US consumers1, 76 percent have changed their spending style due to the recession and 43 percent report that their spending style will remain unchanged post recession. Customers are making informed purchasing decisions, keeping retailers on their toes to provide enhanced shopping facilities and precise information. As a matter of process, customers collect all sufficient information about product features, prices, warranties, availability and environmental impact and then compare these with competitors products, before purchasing. More time is spent researching on the internet about the products they wish to purchase. To boost sales and enhance customer satisfaction, retailers are coming up with innovative techniquesrevamping stores, establishing new retail formats and adopting online and social media to promote/sell products. To address this, Banana Republic opened a concept store in 2009. Further, Marshs efforts to revamp its store formats over the past two years is a significant move away from the chains traditional approach, where all stores sported similar layouts and displayed the same basic product mix. Using psychographic, demographic and transactional data, Marsh teams adjusted foot traffic patterns to give shoppers more options on how to navigate the stores. With this, most categories saw 7-10 percent growth. Retailers are also becoming more technologically sophisticated with in-house (possible competitive advantage) and outsourced (lower price) solutions. Some retailers are
Multi-channel Retail Strategy

Catalog Store
Browse Buy
Buy Return
Online
Mobile
Source: Ovum Research, IMAP
Another factor that is promoting multi-channel retailing is consumer tendencies to mix channels during their purchasing drive with a very particular way of choosing the product they want, where they want it, how they want it and with a variety of delivery options. According to a consumer survey2, 78 percent of respondents in the US have used two or more retailing channels and 30 percent have used three or more channels to research and then finally make their purchases. Thus, the demand for an excellent customer experience across channels is compelling retailers to integrate their multi-channel operations. Retailers need to work on preventing a fragmented shopping experience and allow shoppers to both research and
2 Survey by commerce solution provider ATG, December 2009
1 Survey conducted by comScore, July 2010
buy across all channels. Retailers have started implementing multi-channel strategies such as alternative delivery options, integrated customer service, and aligned marketing efforts that facilitate both researching and buying across channels. In May 2010, Marks & Spencer announced the launch of a new version of its Web site, designed to be easily accessible from mobile devices. This allows customers to conveniently browse and buy items by using their mobile devices. Similarly, Kroger, Safeway and ShopRite are sending "smart electronic shopping coupons" to their customers through wireless devices, televisions and computers. This option lets customers use these coupons to get discounts on their product purchases without going through the trouble of clipping and collecting paper coupons while helping retailers increase their distribution. Tesco, whose online retail sales during the year ending February 2010 grew 7.3 percent annually, set up a consultancy named Task Retail, which will advise Tesco on its online clothing strategy.
monopolies are now few and far between. The Internet has eliminated many of the traditional geographical barriers companies have employed to fend off competitors. Now firms can market their goods and services worldwide. In addition, in developed countries such as the US and UK, the number of potential new customers is shrinking because most large companies have deeply penetrated into their prospect bases. Today, companies have to search for innovative ways to determine how each e-commerce business process impacts the bottom line. Financial analytics tools offer retailers the opportunity to more closely examine their assets and liabilities. These analytic tools that help in performing robust analysis of retail business, covering various areas from product design to marketing to customer care services, have become more important. Unlike the traditional practice of focusing on quality and quantity of goods and services, retailers now are required to do a better job of analyzing their business in order to beat the competition. This will give rise to new customer-driven metrics and new metrics designed to improve the shopper journey and point-ofpurchase experience.
The Web will influence more than half of total retail sales by 2014 in the US
Online product research is not only driving online sales but also land-store sales. In 2009, store sales influenced by online research totaled $917 billion USD in the US1 while retail e-commerce sales were $155 billion USD. It means for every one US dollar in online sales, the internet influenced $5.91 USD of store sales. A majority of consumers are using online channels comparing sites to find bargains. Post recession, consumers have become quite cautious spenders. They do extensive research online before closing the deal. Apart from US, European consumers are also mixing online and offline channels during their multi-channel purchasing decision. Going forward, online and Web-influenced offline retail sales will grow at a 9 percent CAGR over the next five years2, as consumers increasingly use the Internet to research products before purchasing. In brief, any retailer who is not using the online channel to promote offline sales as well as online sales is missing out on opportunities in todays multi-channel scenario.
Cross-border online purchases are booming

In todays cutting-edge scenario, consumers are buying crossborder for various reasons, such as price, quality and unique product selection through international sites. Apart from these key reasons, localization of Web sites also favors cross border purchases. Most cross-border consumers claim they get deals on products from overseas retailers even when shipping costs are considered. Manufacturers selling directly to consumers tend to be conscious of price differences on products in the countries in which they operate. As per one of the surveys conducted in early 20104, nearly one-third of European online buyers made Web purchases outside of their home country. On a similar note, in the US, more than one-quarter bought items from online retailers based outside of the US and among consumers aged 1824, up to one-third of consumers bought from non-US sites5. Also, from the online retailers point of view, these crossborder buyers are desirable consumers because they show high online buying tenure, have high levels of disposable income, and outspend other online buyers. Going forward, retailers will continue to add international or cross-border options in their offerings for consumers, such as adding translated content to sites to attract international buyers. Fruugo, a shopping Web site, has started using machine translation to enable cross-border commerce. Additionally, Urban Outfitters from UK has added separate French- and German-language pages that explain how to order from its site.
Financial analytics becoming integral part of operational strategy3

The e-commerce industry has matured quite rapidly in the time span of a decade. In the developed world, almost every company has an online retail store, hence, merely establishing Web presence does not lead to success in the business. With the maturity of the e-commerce market, customers are now demanding a more comprehensive look at online retail offerings with cost benefit vis--vis the competitors. Traditional marketing methods are no longer viable for a variety of reasons, including the fact that regulated
1 eMarketer 2 Forrester Research 3 http://www.ecommercetimes.com
4 Forrester Research Survey 5 Forrester Research
Types of Consumer-Generated Media
Social media takes retailers to social networks customer-generated content, blogs and wikis are influencing purchases
The rapid adoption and evolution of social media networking sites such as Facebook and Twitter has become so important in terms of influence on consumer behavior and purchasing habits that the retail industry needs to pay attention. Globally, unique visitors to social networking sites have increased 27 percent to 307 million in 2009 from the 2008 level and the average time spent on social media was more than 5.5 hours per month in December 2009, a year-over-year increase of 82 percent1. Moreover, from the product review point of view, 19 percent of Europeans with Internet access read customer reviews and ratings at least monthly, and 46 percent of European Internet users agree that customer ratings and reviews help them to decide whether or not to purchase a product or service2. Therefore, it is essential for retailers to adopt social media marketing practices. Though the concept of social media started gaining momentum in 2009, most retailers avoided or cautiously considered it causing it to remain in a testing phase. However, with the initial signs of an economic recovery and the increases in advertising budgets, investment in social media has increased in 2010. Following successful campaigns through social media, retailers are using social media as a core advertising tool. Shopping sites have increasingly used social media to promote their wares. More than half of retailers had added or improved their Facebook and Twitter pages and nearly two-thirds of retailers had added or enhanced blogs and RSS feeds. Luxury brand Gucci has a Facebook fan following on its official page, which it updates regularly by introducing new photos and videos.
1 Nielsen Research, January 2010 2 Western Europe Technographics Survey, Q1 2010
Emergence of Social Media in Retailing

MicroCommunity Sites Consumer Blogs Media Blogs Social Networks Co-Creation Twitter
Ratings & Review Sites
Feedback Portals
Video Audio Blogs Marketer Blogs
Discussion Forums Groups
Mobile Blogs Video Blogs
Usenet Newsgroups
Early-Stage Internet
Today
Source: Nielsen Research, IMAP
Greeting-card maker Hallmark Cards added a shopping tab on its Facebook page after realizing that its customers are spending more time on Facebook than on Hallmark.com. In this way, Hallmark was able to promote the idea and ability to personalize and buy a real physical card without ever leaving Facebook. Dominos Pizza announced in December 2009 that it would use Facebook, Twitter and other social media to promote its revamped pizza pie. The company decided to produce this new pizza offering after analyzing the feedback from its customers coming in through various social media. In January 2010, Dunkin Donuts launched a marketing campaign to promote donuts and related products, called Twitter Games, on Twitter. The participants were required to "tweet" information such as how they liked their coffee, in order to win gifts from the retailer.
Retailers are looking for quick growth through globalization via non-US markets
Slow growth, heavy discounting, restrictive legislation and more erratic shopping in recession-weary developed markets have made retailers think about international expansion into non-US markets. Retail executives are learning that core markets such as US and Europe are not the powerful engines they once were. Today, relying on developing countries is not only desirable but also mandatory for survival. According to a recent survey of retail executives1, the BRIC region remains the highest priority markets for retail expansion, with nearly 80 percent of respondents citing one of these markets as part of their firms plans for short-term international growth. Along with developed market players, 92 percent of respondents from emerging markets are looking to expand beyond their home market. These emerging market retailers are using their unique insights into local business and culture to expand regionally; a trend that will impact the global retail landscape. In addition, retailers are looking for a shorter payback period of three years (compared to five to seven years in 2005). For expansion, acquisition activities have been mostly in nonfood. Since market concentration has reached a high level, retailers have chosen to expand abroad through partnerships using a franchise model due to government regulations. To support international retailers, local partners business models are made such that they can franchise international brands across the region. While retailers are spreading their footprint internationally, they are not selling goods in the same retail formats as those in their home markets, except hypermarkets and cash and carry. Usually, customers are not open to changing their buying styles and patterns and do not always react well to new concepts. Retailers need to set up channels in line with the consumer mindset with clear segmentation and localization. The real growth will come by operating multiple formats and multiple concepts, targeted to specific customer segments, in specific local markets, for specific end-use needs and occasions, while operating in specific shopping modes. Retailers will need to combine global market savvy and sourcing with local market delivery and know-how.
1 As part of 2010 Global Retail Development Index, A.T. Kearney surveyed 60 retail executives from around the world to identify emerging competitive trends and confirm the GRDI rankings.
Major hurdles to globalization of online retail

Online retailers are entering into global markets without physical infrastructure, and related expenses along with corresponding risk. However, retailers must ensure their e-commerce and regulatory platforms can effectively deal with cross-border sales. Local laws and regulations Each country has its own import and export laws. While doing cross-border transactions, retailers need to understand the dynamics of shipment from a legal point of view. Apart from the list of commonly prohibited items such as currency, livestock and hazardous materials, each country has its own list of goods and services that are forbidden.
Examples of Legal Restrictions

Country
Argentina Australia Brazil China Fiji Iran Peru
List of Items Prohibited

Furs, radios, televisions, phonographs and ready-made clothes Goods produced wholly or partly in prisons or by convict labor Canes and umbrellas Walkie-talkies, wrist watches, cameras, bicycles and sewing machines Dyes and coloring materials Musical instruments, games involving dice or brown sugar Gloves, household linens or wooden utensils
Source: US Postal Service, IMAP
The above mentioned list is indicative of the complexity of cross-border trade. Hence, retailers need to undergo a hardhitting test before setting up business in a new territory. Even duties and taxes create hassles Retailers are required to understand various taxes and duties that are levied across states within a country. These regulations increase in international trade and services and global retailers need to understand the appropriate rates for taxes and duties by country, then calculate, collect, remit and manage these funds. Hence, retailers are required to maintain the discipline across the organization for trade.
O H TInvestment Opportunities
Change in consumer behavior and demand-supply dynamics (due to recessionary blues) has spawned mobile commerce, online grocery stores and online health care.
Online grocery shopping

Online grocery shopping has continued to experience a rapid evolution in recent years, facilitated by the ongoing development of the Internet and related technologies. From a consumer perspective, the convenience factor of placing an order online and having goods delivered to the door is perhaps the biggest appeal to consumers looking for ways to save time or have physical difficulty carrying products. The UK is the most developed online grocery market, with 15 percent of adults having shopped for their groceries online in 2009. The UK market grew at a CAGR of 24.9 percent during the period of 2004 to 2009, reaching a level of $7.8 billion USD in 2009 and is expected to reach $11.8 billion USD by 20143. Another major market is the US, which is catching up with online grocery shopping habits. With its vast online population, the US tops the online grocery shopping arena with a total market size of $9.1 billion USD in 2009. However, the per capita spending is still less for US consumers when compared to the UK market. One key difference with grocery products is freshness: many consumers still prefer to see the produce before purchase, which remains a significant hurdle for the development of the online market. Furthermore, the time lag between placing the order and delivery means that online grocery purchasing only fits with regular, planned shopping rather than impulse or top-up shopping.
Mobile Commerce (M-Commerce)1

M-commerce began in the last decade, and similar to mobile banking, has expanded very little. Despite the massive numbers of mobile users in the US and UK, those who use their phones to make purchases remains few. Tepid demand among consumers, technological limitations and lack of standardization in application has constrained the widespread proliferation of m-commerce. While m-commerce is still immature, retailers are showing interest in this customer service channel with the idea of enhancing the experience by allowing greater interaction between the consumer and retailer. Exploiting mobile technology will enable retailers to become more service-oriented, create more personalized relationships and get better at meeting customer needs. As per a study by the National Retail Federation in the US, 74 percent of online retailers either have in place or are developing mobile commerce strategies (20 percent have already implemented their complete plans). A number of recognized retail brands have launched m-commerce programs. For m-commerce, eBay is the clear leader with their iPhone application launched in 2008, and Blackberry and Android applications that were launched in 2009 and 2010. In 2009, the company experienced more than $600 million USD in goods sold via the mobile application a 200 percent increase from 2008. On new start-ups, MLB, the Philadelphia Phillies and Aramark began allowing consumers to use their iPhones to order food. Sears has effectively used mobile for customer service by sending text alerts to confirm that a Web order is ready for in-store pickup. M-commerce revenues are still small in most markets, but 2010 will be the first meaningful year for this channel. By 2015, shoppers around the world will spend about $119 billion USD on goods and services bought via their mobile phones2. In the US alone, mobile shopping rose from $396 million USD in 2008 to $1.2 billion USD in 2009, and is forecasted to reach about $2.2 billion USD in 2010.
Online healthcare
Nowadays, healthcare consumers gather information online which includes healthcare-related information and services, looking for doctors, researching medicines, sharing personal health details and tracking health conditions for themselves. While consumers are becoming more self-reliant and empowered, healthcare providers are beginning to offer their services online and learning how to become more consumer-focused. Given this evolution, online healthcare marketers in the US have the opportunity to build a bridge between healthcare providers and patients. It is estimated that the market for electronic health records will reach about $5 billion USD by 2015, according to Kalorama Information. To capture this vast potential, Google and Wal-Mart have together invested significantly in online healthcare services.
3 Datamonitor Research
1 M-commerce is the buying and selling of goods and services through wireless handheld devices such as cellular telephones and personal digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to access the Internet without needing to find a place to plug in. 2 Study by ABI Research
Future Outlook
Even though retail sales exhibited signs of recovery towards the beginning of 2010, there is skepticism regarding the retail outlook for the developed economies. Western Europe will remain depressed, restrained by markets such as Ireland, Spain and the UK, which continue to face problems such as high government borrowing, household debt and unemployment. North America is expected to witness a slight improvement but growth will be subdued because of more jobless claims. Multistore chains continue to respond to recessed retail consumption with store closings. The number of retail store closures in 2010 so far appears to be lower compared to that in 2009. However, it is still significant. Despite this, global retail sales growth is expected to be 7.3 percent in 2010, before slowing to 5.8 percent in 2011 and then rising again to 7.4 percent in 2012. In terms of volume growth, the global retail market is expected to return to comparable pre-2008 levels only by 20111. To survive in these tough times, retailers must increasingly look to enhance their multi-channel retailing capabilities, as customers are tending to purchase more and more through multiple channels. The best performers in the retail industry will be those that optimally combine the brick-and-mortar experience with the electronic retailing experience, keeping in mind the interest of the customer. Given the pessimism prevailing in the retail segment, non-store and online sales will likely remain strong as buyers will continue to buy online to obtain lower prices. Off-mall value specialty stores and small-ticket discretionary categories may see a return to profitability and growth. It is expected that in the next couple of years online sales will be shipped directly from the manufacturer to the consumer on a just-in-time basis. Internet retailing through mobile devices offers a huge opportunity for growth, as growth in traditional online retail matures. This can be primarily attributed to the expected global growth in mobile Internet usage. Whatever the future holds, the Internet will continue to break down barriers to create a level playing field for companies, countries and individuals around the world.
Global Retail Sales

2005
Retail Sales (USD billion) Retail Growth Rate Online Sales (USD billion) Online Growth Rate 11,100 181
2006
11,900 7.2% 222 22.7%
2007
13,200 10.9% 271 22.1%
2008
14,500 9.8% 304 12.4%
2009
13,900 -4.1% 349 14.5%
Source: EIU, August 2010 1 EIU
Appendix A: Global overview of retail and online retail

Value chain of the retail market
The retail industry is composed of individuals and companies engaged in the sale of finished products to end-user consumers. It implies that retailing is the final step in the distribution of merchandisethe last point in the supply chainconnecting the bulk producers of commodities to the final consumers, Retailing covers diverse products such as food, apparels, consumer goods, financial services, leisure, etc.
Retail Value Chain
Considering the nature of the business, retailing is extremely competitive and the failure rate of retail establishments is relatively high. While price is the most important arena of competition, other factors such as location, selection and display of merchandise, attractiveness of the establishment and reputation also matter. Retail is usually classified by the type of products as follows: - Food products - Soft goods: clothing, apparel and other fabrics - Hard goods (hardline retailers): appliances, electronics, furniture, sporting goods, etc. Traditionally, the retail business was dominated by smaller familyrun or regionally targeted stores, but this market is increasingly being taken over by multinational conglomerates such as WalMart and Sears, indicating the era of retail globalization.
Source: Image taken from Microsoft website
These larger retailers have managed to set up huge supply/ distribution chains, inventory management systems, financing pacts and wide-scale marketing plans. This dynamic nature of the retail business has created different business models and a wide range of new formats such as vending machines, door-to-door and telephone sales, direct-mail marketing, online retailing1, and traditional formats such as discount houses, specialty stores, department stores, supermarkets, and consumer cooperatives. This has led to the emergence of multichannel retailing, which refers to the concept of selling goods through multiple channels rather than just one, such as traditional stores.
1 Online retailing is a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order.
Major formats of in-store retailers

Format Branded Stores Specialty Stores (Multi-brand) Department Stores Supermarkets Discount Stores Hyper-marts Convenience Stores Shopping Malls Description
Value Proposition Complete range available for a given brand, certified product quality Greater choice to the consumer, comparison between brands possible One-stop shop catering to varied consumer needs One-stop shop catering to varied consumer needs Low prices Low prices, vast choice available including services as cafeterias Convenient location and extended operating hours Variety of shops available close to each other
Exclusive showrooms either owned or franchised by a manufacturer Focus on a specific consumer need, carry most of the brands available Large stores having a wide variety of products; organized into different departments, such as clothing, house-wares and toys Extremely large self-service retail outlets Stores offering discounts on the retail price by selling high volumes and through economies of scale Larger than a supermarket, sometimes with a warehouse appearance; generally located in quieter parts of the city Small self-service formats located in crowded urban areas An enclosure having different formats of in-store retailers all under one roof
Major formats of non-store retailers*

Format Direct Response Television (DRTV) Advertising Including Infomercials Catalog Sales/ Online Catalog Sales Vending Machines E-commerce Multi-level Marketing Description Marketed directly over television, with prominent display of a toll-free number and/or internet address, asking the consumer to take specific action leading to or making a product sale Customers select products from catalogs and fill out an order form. The order is brought to the sales executive, who completes the order through the warehouse Chewing gum to hot meals have been sold through these machines and have become an integral part of contemporary consumption Buying and selling of products or services over electronic systems such as the Internet and other computer networks Products and company are marketed directly to consumers and potential business partners by means of relationship referrals and word-of-mouth marketing Value Proposition Rapidly and cost-effectively introduce a new product or revive an under-marketed product Lower prices than other retailers and lower overhead expenses due to the smaller size of the store No human efforts required; vending machines are beneficial for low-cost consumables Increases consumers ability to gather information about products and prices Cost of logistics is low
* Those engaged in the sale of products using marketing methods which do not include a physical location
IMAPs Retail Industry Global Report 2010: Appendix A-i
Global Overview of Retail Sector

Global retail sales declined 3.7 percent in 2009 to 13.9 trillion USD1. While sales for 2009 were low, it is worthwhile to note that sales of the global retail industry have doubled since 2003 when worldwide retail sales were $7 trillion USD. Along with sales growth, profitability for most retailers was also sharply affected. Profit margins of the 200 largest retailers in the world fell to 2.4 percent from 4.1 percent during fiscal 2008-09 with more than 30 retailers reporting operating losses2. This trend affected almost every retail category and geographical area except Africa and the Middle East where retailers saw an increase in profitability. The composition of the top 10 retailers in the world remained the same in 2009 compared to the previous year. This group now accounts for more than 30 percent of total retail sales of the top 250 retailers. Wal-Mart remained the worlds largest retailer, ahead of Carrefour Group. In major markets such as the US and UK, retail spending is expected to decline, while emerging markets such as China and India should have strong growth in 2010. There are signs of improvement for US consumers, but the recent destruction of wealth is expected to limit consumer spending. Asia is believed to represent the best growth prospects for retailers and consumerproduct companies in 2010.
Despite the global economic slowdown, many retailers such as cash-rich private companies have continued their expansion plans throughout the past 12 months. A survey of 280 retailers5 saw them expand their international presence by two more countries than in the previous year. This was primarily in clothing, footwear and accessories.
Multi-channel retailing
According to a consumer survey6, 78 percent of respondents in the US used two or more retailing channels and 30 percent used three or more channels to research and then finally make their purchases. Similarly, in Europe, the population purchasing online increased from 32 percent in 2008 to 37 percent in 20097. To grab the benefits of multi-channel retailing, players are enhancing their capabilities. - For example, in May 2010, Marks & Spencer announced the launch of a new version of its Web site, designed to be easily accessible from mobile devices. This will allow customers to conveniently browse and buy items by using their mobile devices. - Similarly, Kroger, Safeway and ShopRite are sending smart electronic shopping coupons to their customers through wireless devices, television and computers. This option lets customers use these coupons to get discounts on their product purchases without going through the trouble of clipping and collecting paper coupons while helping retailers increase their distribution. - Tesco, whose online retail sales during the year ending February 2010 grew 7.3 percent annually, has set up a consultancy named Task Retail, which will advise Tesco on its online clothing strategy.
Retail globalization
Among developed countries, the UK continues to lead the world as the most international retail market. Europe maintains its ability to attract the worlds top retailers in 2009, with 58% of the worlds top 250 retailers having a presence in Europe. The UK outperformed other major European economies such as Spain, France, Germany and Italy, ranking first among the top 15 most international retail markets. European retailers are more prone to globalization than American retailers because they face restrictions on development in their home markets. In France, due to regulations, hypermarkets cannot open new stores in their home market easily. Consequently, they principally seek growth in other markets. This is why the lions share of global retailers is based in Europe. The US was 10th globally, with 39% of international retailers. This can be attributed, at least in part, to the size, maturity and strength of its domestic market. US retailers tend to penetrate their vast national market extensively before considering international expansion. Although Europe continues to dominate, with eight out of the top 15 most international retail locations, emerging economies such as China, Russia and the UAE have gained significant ground in the past 12 months. According to a recent survey of 60 retail executives from around the world3, the BRIC4 region remains the highest priority markets for retail expansion, with nearly 80 percent of respondents citing one of these markets as part of their firms plans for short-term international growth. Along with developed market players, emerging market-based local retailers have begun expanding outside their region. In a similar survey, 92 percent of respondents from emerging markets are looking to expand beyond their home market, with close to 30 percent of those saying a developed country is among their top three expansion targets. These emerging market retailers are using their unique insights into local business and culture to expand regionally in a trend that will impact the global retail landscape. In addition, retailers are looking for a shorter payback period of three years, compared to five to seven years in 2005.
1 Economist Intelligence Unit (EIU) 2 Bloomberg 3 As part of 2010 Global Retail Development Index, A.T. Kearney surveyed 60 retail executives from around the world to identify emerging competitive trends and confirm the GRDI rankings. 4 Brazil, Russia, India and China countries
Rise of online retailing

Global online retail sales grew by 14.5 percent in 2009 to reach 348.6 billion USD8. Electronics is the largest segment in global online retail sales, contributing around 22.6 percent. The US is the biggest market for online retail sales with 37.2 percent market share, whose total retail e-commerce spending reached 129.8 billion USD in 20099, marginally lower than the 2008 level of 130.1 billion USD. A high level of product differentiation together with low fixed costs and dynamic market revenue growth is seen in the US market. However, it also creates rivalry in the market as a large number of players are active along with the absence of consumer switching costs. Online retail sales still account for only 2.5 percent of total retail sales on a global basis. On an average, online sales account for 6.6 per cent of total sales for the top 100 retailers in the world10. Hence, most retailers have yet to make a strong online push through multi-channel retailing. By 2014, global online retail sales are expected to be 778.6 billion USD11, increasing at a CAGR of 22.2 percent. To sustain this level of sales, internet penetration in North America, Europe and AsiaPacific is expected to increase by 10.6 percent, 7.6 percent and 12.7 percent12 on a y-o-y basis respectively.
5 6 7 8
CB Richard Ellis Survey by commerce solution provider ATG, December 2009 IDC Retail Insight Data monitor, July 2010. The online retail market consists of the total revenues generated through the sale of retail goods via online channels, valued at retail selling price. 9 The US Department of Commerce 10 Forrester Research, January 2010 11 Data monitor, July 2010 12 State of Retailing Online
IMAPs Retail Industry Global Report 2010: Appendix A-ii
Thumbnail summaries of top 50 retail companies

1: Wal-Mart Stores, Inc. (US)
Brief description Operational Format Financials (LTM) Expected capital expenditure (2011) Geographic coverage (2010) Future plans
Offers a full time supermarket and a limited assortment of general merchandise with operations in three business segments: Wal-Mart U.S., International and Sams Club. Cash & Carry/Warehouse Club, Discount Department Store, Hypermarket/Supercenter/Superstore, supermarket and online retail. Revenue: $417 billion USD, year-over-year change: 0.95% Operating profit: $24.8 billion USD, year-over-year change: 5.1% Net income: $14.8 billion USD, year-over-year change: 7.0% $3.9 billion USD US: 75%; Rest of the world: 25% Expects to add more than 600 stores during fiscal year 2011.
2: Carrefour S.A. (France)

Offers a range of food and non-food products. Carrefour SA's supermarket chains include, among others, Champion and Norte brands, which primarily offer food, clothing and household goods. Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Discount Store, hypermarket, Supercenter/Superstore, Supermarket and online retail store Revenue: $122 billion USD, year-over-year change: (1.14%) Operating profit: $2.4 billion USD, year-over-year change: (39.0%) Net income: $650 million USD, year-over-year change: (74.2%) NA France: 45%; Europe(except France): 33%; Latin America: 14%; Asia: 8% In India, it is expected to set up 150 hypermarkets while in the global level it is planning to setup 50 supermarkets under the Carrefour Market banner and 30 convenience stores under the Carrefour express banner.
3: McKesson Corp. (US)

Distributes pharmaceutical products, medical surgical supplies, healthcare and beauty products and develops software to facilitate health enterprise. Also offers analytic, care management and patient solutions for payers. Drugs/medical-surgical equipment distribution. Revenue: $109 billion USD, year-over-year change: 1.94% Operating profit: $2 billion USD, year-over-year change: 17.7% Net income: $1.3 billion USD, year-over-year change: 53.5% $81 million USD US: 91%; Rest of the world: 9% Planning to expand through acquisitions
4: Cardinal Health. (US)

Specializes in health care supply chain services. Provides pharmaceutical and medical products and services to healthcare providers and manufacturers. Pharmaceutical distribution, distribution and consulting, retail pharmacy franchising and online store Revenue: $99 billion USD, year-over-year change: 2.6% Operating profit: $1.4 billion USD, year-over-year change: (2.9%) Net income: $642 million USD, year-over-year change: (44.2%) $62.5 million USD US: 99%; Rest of the world: 1% Planning acquisitions to expand their role as a service provider in healthcare industry, along with investment in nuclear pharmacy business.
5: CVS Caremark Corp. (US)

Provides pharmacy services, sells branded and generic drugs, as well as household goods. Operates a chain of drug stores throughout the US. Drug Store/Pharmacy and online retail Revenue: $98 billion USD, year-over-year change: 12.87% Operating profit: $64 billion USD, year-over-year change: 6.5% Net Income: $3.7 billion USD, year-over-year change: 15.1% $632 million USD US: 100% Plans to enter in new markets such as Puerto Rico, Memphis, and St. Louis.
IMAPs Retail Industry Global Report 2010: Appendix A-iii
6: Metro AG. (Germany)

Germany-based trading and retail company which operates through retail stores and marketing of products over the internet. It acts as the holding company for the Metro Group. Apparel/Footwear Specialty, Cash & Carry/Warehouse Club, Department Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket and Online retail. Revenue: $92 billion USD, year-over-year change: (3.57%) Operating profit: $2.3 billion USD, year-over-year change: (15%) Net income: $644 million USD, year-over-year change: (4.5%) NA Germany: 40%; Europe: 56%; Asia/Africa: 4% Focus to grow in the region of Eastern Europe and Asia and also aim at a profit improvement potential of 1.5 billion Euro by 2012 with effective cost reduction methods.
7: Tesco Plc. (UK)

Tesco is an international retailer mainly dealing in food retailing. In addition it also provides retail banking and insurance services through its subsidiary Tesco Bank. Convenience/Forecourt Store, Department Store, Discount Department Store, Hypermarket/Supercenter/ Superstore, Supermarket and online retail. Revenue: $90 billion USD, year-over-year change: 5.59% Operating profit: $4.9 billion USD, year-over-year change: 5% Net income: $3.7billion USD, year-over-year change: 9.1% $5.5 billion USD UK: 74%; Europe: 15%; Rest of the world: 11% Planning to invest in retail and in banking operations.
8: The Kroger Co. (US)

Brief description Operational Format Financials (LTM) Expected capital expenditure (2011) Geographic coverage (2010) Future plans A US based retailer which manufactures, processes and sells food products in its own supermarkets. Convenience/Forecourt Store, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket and Online retail. Revenue: $80 billion USD, year-over-year change: 1% Operating profit: $2.1 billion USD, year-over-year change: (10.1%) Net income: $16 million USD, year-over-year change: (94.4%) $1.9 2.1 billion USD US: 100% Plan to invest in capital projects during 2010 with a strong focus towards remodels and infrastructure projects.
9: Schwarz Unternehmens Treuhand KG. (Germany)**

Brief description Operational Format Financials (2008) Expected capital expenditure (2010) Geographic coverage (2009) Future plans A hard discounter, it offers lowest prices on privately sourced products and private label brands. Discount Store, Hypermarket/Supercenter/Superstore Revenue: $79.9 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net Income: NA, year-over-year change: NA NA Pan Europe NA
10: Amerisourcebergen Corp. (US)

A pharmaceutical services company, servicing both healthcare providers and pharmaceutical manufacturers in the pharmaceutical supply channel. The company provides drug distribution and related services. Retail and Online stores Revenue: $77 billion USD, year-over-year change: 2.24% Operating profit: $1.1 billion USD, year-over-year change: 7.2% Net income: $626 million USD, year-over-year change: 101.0% $33.5 million USD NA Undertake cost cutting measures
11: Costco Wholesale Corp. (US)

Sells all kinds of food, automotive supplies, toys, hardware, sporting goods, jewelry, electronics, apparel, health and beauty aids and other goods Cash & Carry/Warehouse Club and Online store Revenue: $76 billion USD, year-over-year change: (1.46%) Operating profit: $2 billion USD, year-over-year change: (9.1%) Net Income: $1.2 billion USD, year-over-year change: (15.3%) $542 million USD US: 79%; Canada: 14%; Rest of the world: 7% Planning to expand its chain of wholesale depots
IMAPs Retail Industry Global Report 2010: Appendix A-iv
12: Rewe-Zentral AG. (Germany)**

Brief description Operational Format Financials (2008) Expected capital expenditure (2010) Geographic coverage (2008) Future plans A food retailer & Co-operative in Europe owned by some 3,000 of its independent retail members. Cash & Carry/Warehouse Club, Discount Store, Drug Store/Pharmacy, Electronics Specialty, Home Improvement, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket Revenue: $73.2 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net income: NA, year-over-year change: NA NA Pan Europe NA
13: The Home Depot, Inc. (US)

A home improvement retailer which sells an assortment of building materials, home improvement, lawn and garden products and provides a number of services. Home Improvement Revenue: $67 billion USD, year-over-year change: 2.9% Operating profit: $5.3 billion USD, year-over-year change: (7.1%) Net income: $2.9 billion USD, year-over-year change: 10.2% $366 million USD US: 90%; Rest of the world: 10% Plans to open more stores.
14: Target Corp. (US)

An American retailing company which provides different products range with its discount chain and online business. Discount Department Store, Hypermarket/Supercenter/Superstore and Online store Revenue: $67 billion USD, year-over-year change: 1.1% Operating profit: $5.0 billion USD, year-over-year change: 6.2% Net income: $2.7 billion USD, year-over-year change: 12.4% $1.1 billion USD US: 100% Planning to open new stores
15: Aldi GmBh & co OHG. (Germany)**

Brief description Operational Format Financials (2008) Expected capital expenditure (2010) Geographic coverage (2008) Future plans
Owns and operates a chain of discount grocery stores whose products include food, alcoholic drinks, electrical products, kitchenware, toys, clothing, and flowers. Discount Store, Supermarket and Online store Revenue: $66.1 billion USD, year-over-year change: NA Operating: NA, year-over-year change: NA Net Income: NA, year-over-year change: NA NA Europe, US, and Australia NA
16: Walgreen Co. (US)

Offers health services, including primary and acute care, wellness, pharmacy and disease management services and health and fitness. Drug Store/Pharmacy and Online store Revenue: $66 billion USD, year-over-year change: 7.3% Operating profit: $3.4 billion USD, year-over-year change: (5.6%) Net income: $2.1 billion USD, year-over-year change: (7%) $450 million USD US: 100% Planning acquisitions for its growth strategy.
17: Groupe Auchan S.A. (France)**

Operates as a food and general retailer. It provides a range of products, such as fresh produce, beauty and baby products, and wines. In terms of its diversified offering, it also provides financial products and services, and automated payment systems primarily to retail customers. Discount Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket Revenue: $55.1 billion USD , year-over-year change: 0.5% Operating profit: $1.7 billion USD, year-over-year change: (0.8%) Net income: $918 million USD, year-over-year change: (6.5%) $2.1 billion USD France: 47%; Western Europe: 29%; Central and eastern Europe and Asia: 24% Focus on developing its E-commerce activities and to open more shopping centers.
IMAPs Retail Industry Global Report 2010: Appendix A-v
18: Edeka Zentrale AG. (Germany)**

Sells frozen foods, breakfast foods, cooking and baking products, nibbles and sweets, alcoholic beverages, pet foods, and household and cleaning products. Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Discount Store, Electronics Specialty, Home Improvement, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket and Online store Revenue: $52.8 billion USD, year-over-year change: 18.7% Operating profit: NA million USD, year-over-year change: NA Net Income: NA million USD, year-over-year change: NA NA Austria, Denmark, Germany NA
19: Best Buy Co, Inc. (US)

A multinational e-retailer of consumer electronics, home office products, entertainment software, appliances and related services. Electronics Specialty and Online store Revenue: $51 billion USD, year-over-year change: 10.3% Operating profit: $2.4 billion USD, year-over-year change: 13.6% Net income: $1.4 billion USD, year-over-year change: 31.3% $221 million USD US: 75%; Rest of the world: 25% Focus on international growth strategy
20: Seven & I Holdings Company Ltd. (Japan)

It is involved in electronic commerce services, Internet-related services, meal delivery services, publishing and property management businesses. Retail business is primarily based out of Japan and North America. Apparel/Footwear Specialty, Convenience/Forecourt Store, Department Store, Hypermarket/Supercenter/ Superstore, Other Specialty, Supermarket and Online store Revenue: $49 billion USD, year-over-year change: (10.7%) Operating profit: $2.4 billion USD, year-over-year change: (19.6%) Net Income: $481 million USD, year-over-year change: (51.4%) NA Japan: 70%; North America: 28%; Rest of the world: 2% Plans to introduce new format stores and specialty stores.
21: Aeon company, Ltd. (Japan)

Operates general merchandise stores and also engaged in womens and casual clothing store, business and development of commercial property, and financing services through property. Apparel/Footwear Specialty, Convenience/Forecourt Store, Department Store, Discount Store, Drug Store/Pharmacy, Home Improvement, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket Revenue: $49 billion USD, year-over-year change: 3.47% Operating profit: $1.4 billion USD, year-over-year change: (4.7%) Net income: $333 million USD, year-over-year change: NA NA Japan: 92%; Rest of the world: 8% Planning cost restructuring program and focus on China market development
22: Lowes Companies, Inc. (US)

Distributes building materials and supplies through stores in the US. Offers a complete line of products and services for home decoration, maintenance, repair, re-modeling and property maintenance. Home Improvement and online store Revenue: $48 billion USD, year-over-year change: (2.09%) Operating profit: $3.3 billion USD, year-over-year change: (17.8%) Net income: $1.9 billion USD, year-over-year change: (18.8%) $516 million USD North America: 100% Plans to open some new stores
IMAPs Retail Industry Global Report 2010: Appendix A-vi
23: Centres distribeutrs E. Leclerc. (France)**

A retailing private cooperative grouping with nearly of 500 members and has a dominant presence in the French market. Convenience/Forecourt Store, Discount Store, Home Improvement, Hypermarket/Supercenter/ Superstore, Other Specialty, Supermarket and Online retail Revenue: $47.5 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net Income: NA, year-over-year change: NA NA France, Italy, Poland, Portugal, Slovenia, Spain NA
24: Woolworths Ltd. (Australia)

Australia based retailer in the manufacturing, export and wholesale of processed foods. It also operates in hospitality business which includes hotels, pubs, F&B, and gaming operations. Convenience/Forecourt Store, Discount Department Store, Electronics Specialty, Other Specialty, Supermarket and Online store Revenue: $46 billion USD, year-over-year change: 4.2% Operating profit: $2.7 billion USD, year-over-year change: 9.3% Net income: $1.8 billion USD, year-over-year change: 10.1% $1.8 billion USD Australia: 92%; New Zealand: 8% Plans to open new stores
25: Wesfarmers Ltd. (Australia)

Owns retail chains, operates mines, writes insurance, manufacture and distributes industrial products, manufacture fertilizers and chemicals, and distributes liquefied petroleum gas and medical and industrial gases. Supermarket and Online retail Revenue: $45 billion USD, year-over-year change: 1.6% Operating profit: $2 billion USD, year-over-year change: (8.4%) Net income: $1.4 billion USD, year-over-year change: 2.8% $2.1 billion USD Australia: 100% Focus to improve margins, capital management, expenses, the operations and performance of individual stores.
26: ITM Dveloppement International (Intermarch). (France)**

Brief description Operational Format Financials (2008) Expected capital expenditure (2010) Geographic coverage (2008) Future plans A French co-operative and consortium of independent retailers Apparel/Footwear Specialty, Convenience/Forecourt Store, Discount Store, Home Improvement, Other Specialty, Supermarket Revenue: $44.5 billion USD, year-over-year change: NA Operating Income: NA , year-over-year change: NA Net Income: NA year-over-year change: NA NA Belgium, Bosnia-Herzegovina, France, Poland, Portugal, Romania, Serbia, Spain NA
27: Sears Holdings Corp. (US)

A broad line retailer with full line and specialty retail stores. Retails home appliances, as well as tools, lawn and garden products, home electronics, and other products. It also provides automotive repair and maintenance. Apparel/Footwear Specialty, Department Store, Discount Department Store, Home Improvement, Hypermarket/Supercenter/Superstore, and Online store. Revenue: $44 billion USD, year-over-year change: (5.8%) Operating profit: $695 million USD, year-over-year change: 20.8% Net Income: $280 million USD, year-over-year change: 343% $125 million USD US: 90%; Canada: 10% Planning to add new product line with their Kenmore business and concentrate on international expansion.
IMAPs Retail Industry Global Report 2010: Appendix A-vii
28: Safeway Inc. (US)

A food and drug retailer with a network of distribution, manufacturing and food-processing facilities, it owns and operates GroceryWorks.com, an online grocery channel doing business under the names Safeway.com, Vons.com and Genuardis.com Supermarket and Online store Revenue: $41 billion USD, year-over-year change: (7.4)% Operating profit: $1.2 billion USD, year-over-year change: (27.4)% Net Loss: $1.2 billion USD, year-over-year change: NA $243 million USD US: 85%; Canada: 15% Undertake cost cutting measures.
29: Koninklijke Ahold N.V. (Netherlands)

Deals in food articles and also retails health and beauty supplies, prescription drugs, and wine and liquor. Also retails food over the internet in Netherlands and the US. Convenience/Forecourt Store, Discount Store, Drug Store/Pharmacy, Hypermarket/Supercenter/ Superstore, Other Specialty, Supermarket and Online store Revenue: $40 billion USD, year-over-year change: 8.9% Operating profit: $1.9 billion USD, year-over-year change: 7.9% Net income: $1.4 billion USD, year-over-year change: (17%) NA US: 58%; Netherlands: 36%: Rest of the Europe: 6% Plans acquisitions for the growth and undertaking cost cutting measures
30: SuperValu Inc. (US)

Deals in pharmaceuticals and also provides supply chain services, which includes wholesale distribution and related logistics support services Discount Store, Drug Store/Pharmacy, Hypermarket/Supercenter/Superstore, Supermarket and Online store Revenue: $39 billion USD, year-over-year change: (8.9%) Operating profit: $1.1 billion USD, year-over-year change: (12.1%) Net income: $347 million USD, year-over-year change: NA $161 million USD US: 100% Undertake cost cutting measures for effective pricing strategy.
31: Grazziotin S.A. (Brazil)

Sells clothes, shoes, accessories and home furnishing, among others. The Company operates in the Brazilian states of Rio Grande do Sul, Parana and Santa Catarina. Grazziotin SA sells its products through 257 stores divided into four networks of department stores. Department and Specialty stores Revenue: $39 billion USD, year-over-year change: 5.7% Operating profit: $7.1 billion USD, year-over-year change: (3.0%) Net income: $5.5 billion USD, year-over-year change: (6.8%) NA Brazil: 100% NA
32: Finatis S.A. (France)

Brief description Operational Format Financials (LTM) Expected capital expenditure (2010) Geographic coverage (2007) Future plans A holding company with interests in the commercial property investment, food and sport goods distribution Retail stores and Online stores Revenue: $38 billion USD, year-over-year change: (1.23%) Operating profit: $1.8 billion USD, year-over-year change: (2.4%) Net Income: $36 million USD, year-over-year change: NA NA France: 72%; South America: 18%; Rest of the world: 10% NA
33: Rallye S.A. (France)

Presence in the food and specialized retail sector, through its majority interest in Groupe Casino and Groupe Go Sport. Hypermarkets, supermarkets, and convenience stores Revenue: $38 billion USD, year-over-year change: (1.23%) Operating profit: $1.7 billion USD, year-over-year change: (3.0%) Net income: $109 million USD, year-over-year change: NA $0.124 million USD France: 67%; South America: 24%; Asia: 6%; Rest of the world:3% NA
IMAPs Retail Industry Global Report 2010: Appendix A-viii
34: Casino Guichard-Perrachon S.A. (France)

Distributes a range of products via a chain of more than 10,000 stores and also provides supplementary services such as restaurants and foodservice. Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Discount Department Store, Discount Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Non-Store, Other Specialty, Supermarket and Online retail. Revenue: $37 billion USD, year-over-year change: (1.2%) Operating profit: $1.7 billion USD, year-over-year change: (4.4%) Net income: $733 million USD, year-over-year change: 19.4% NA France: 66%; Latin America: 24%; Asia: 6%; Rest of the world: 4% Planning to expand through new store concept and to restructure capital structure.
35: Sysco Corp. (US)

Distributes food and retailed products primarily to the foodservice industry. Also distributes personal care guest amenities, housekeeping supplies, room accessories, and textile to the lodging industry. Wholesale Distribution Revenue: $37 billion USD, year-over-year change: 1.1% Operating profit: $2 billion USD, year-over-year change: 5.5% Net income: $1.2 billion USD, year-over-year change: 11.7% $176 million USD US: 90%; Canada: 9%; Rest of the world: 1 % Planning investment in new technology and a disciplined acquisition program along with cost reduction methodologies.
36: J Sainsbury Plc. (UK)

Principal activities are grocery retailing and financial services. Its businesses are organized into three operating segments: Retailing (Supermarkets and Convenience); Financial services (Sainsburys Bank joint venture), and Property investment (British Land joint venture and Land Securities joint venture). Convenience/Forecourt Store, Hypermarket/Supercenter/Superstore, Supermarket and online retail. Revenue: $32 billion USD, year-over-year change: 5.6% Operating profit: $1.1 billion USD, year-over-year change: 11.7% Net income: $934 million USD, year-over-year change: 102.4% $1.6 billion USD UK: 100% Plans to open more stores with the target to increase space by 15% by March 2011 and reduce net debt by $1.9 billion Euro.
37: The Ikea Group. (Sweden)**

A Dutch Corporation in home products business that designs and sells furniture, appliances and home accessories. Other Specialty Revenue: $31.7 billion USD, year over-year change: NA Operating profit: NA, year-over-year change: NA Net income: NA, year-over-year change: NA NA Global presence NA
38: Celesio AG. (Germany)

Deals in pharmaceuticals, operates in retail pharmacies, and provides logistics and transportation services for pharmaceuticals. Wholesale and Retail Revenue: $31 billion USD, year-over-year change: 1.6% Operating profit: $703 million USD, year-over-year change: (11.6%) Net Loss: $41 million USD, year-over-year change: NA $211 million USD France: 32%; Rest of Europe: 27%; UK: 22%; Germany: 19% Focus on improvement of EBITDA under Agenda 2015 program
IMAPs Retail Industry Global Report 2010: Appendix A-ix
39: George Weston Ltd. (Canada)

Processes and distributes food throughout North America to grocer, wholesalers, warehouses and independent accounts. The company also processes and packages fish. Supermarkets and online retail Revenue: $30 billion USD, year-over-year change: (1%) Operating profit: $1.2 billion USD, year-over-year change: (9.6%) Net Income: $317 million USD, year-over-year change: 24.4% NA Canada: 98%; US: 2% Undertake cost cutting measures
40: Loblaw Companies Ltd. (Canada)

Brief description Operational Format Financials (LTM) Expected capital expenditure (2010) Geographic coverage (2009) Future plans A food distributor and a provider of drugstore, general merchandise, financial products and services. Cash & Carry/Warehouse Club, Discount Store, Hypermarket/Supercenter/Superstore, Supermarket and Online store Revenue: $29 billion USD, year-over-year change: (0.22%) Operating profit: $1.2 billion USD, year-over-year change: 14.5% Net income: $634 million USD, year-over-year change: 19.3% $285 million USD Canada: 100% Plans to invest in infrastructure and undertake cost cutting measures
41: Amazon.com, Inc. (US)

A US based multinational electronic commerce company, offers services to consumers, sellers, and developers through its retail Websites. It also manufactures and sells the Kindle e-reader.. Online Store Revenue: $29 billion USD, year-over-year change: 27.8% Operating profit: $1.4 billion USD, year-over-year change: 34.1% Net income: $1.1 billion USD, year-over-year change: 39.8% $266 million USD North America: 52%; Rest of the world: 48% Focus on international online segment
42: Delhaize Group. (Belgium)

A food retailer which operates in eight countries whose principal activity is the operation of food supermarkets. It also engages in food wholesaling to stores and in nonfood retailing of products such as pet products and health and beauty products. Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Discount Store, Hypermarket/Supercenter/ Superstore , Other Specialty, Supermarket and Online retail. Revenue: $28 billion USD, year-over-year change: 4.8% Operating profit: $1.3 billion USD, year-over-year change: 4.2% Net Income: $704 million USD, year-over-year change: 10.1% NA US: 68%; Belgium: 24%; Greece: 7%; Rest of the world: 1% Plans to open new stores
43: Systme U Centrale Nationale. (France)**

Co-operative traders society engaged in retailing of groceries, apparels and other related products. It also offers several services, including rent a vehicle, mobile services and other related services. Discount Store, Hypermarket/Supercenter/Superstore, Supermarket Revenue: $25.1 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net income: NA, year-over-year change: NA NA France, Martinique, Mauritius, New Caledonia, Reunion, Tahiti NA
44: El Corte Ingls, S.A. (Spain)**

Operates a chain of departmental stores in Spain. It provides various articles and personal services to its customers. The company also operates a convenience store in Madrid. Department Store and online store Revenue: $25.1 billion USD, year-over-year change: NA Operating Income: NA, year-over-year change: NA Net Income: $542 million USD, year-over-year change: NA NA Belgium, Greece, Mexico, Portugal, Spain NA
IMAPs Retail Industry Global Report 2010: Appendix A-x
45: Migros-Genossenschafts Bund. (Switzerland)**

Brief description Operational Format Financials (2008) Expected capital expenditure (2010) Geographic coverage (2008) Future plans One of Switzerland's largest enterprises, it is largest supermarket chain and largest employer in country. Apparel/Footwear Specialty, Convenience/Forecourt Store, Department Store, Discount Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket and Online store Revenue: $23.8 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net Income: NA, year-over-year change:NA NA France, Germany, Switzerland NA
46: Mercadona S.A. (Spain)**

Brief description Operational Format Financials (2009) Expected capital expenditure (2011) Geographic coverage (2009) Future plans A Spanish family-owned supermarket company whose business model is based on low prices. Supermarket and Online store Revenue: $20 billion USD , year-over-year change: 1% Operating profit: $513 million USD, year-over-year change: (13%) Net Income: $375 million USD, year-over-year change: (15%) NA Spain: 100% Plans to invest in logistics
47: The TJX companies, Inc. (US)**

Brief description Operational Format Financials (2008) Expected capital expenditure (2010) Geographic coverage (2008) Future plans An off-price apparel and home fashions retailer in the US and worldwide. Apparel/Footwear Specialty, Other Specialty Revenue: $19 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net income: $881 million USD, year-over-year change: NA NA Canada, Germany, Rep. of Ireland, Puerto Rico, UK, U.S. NA
48: Coop Italia. (Italy)

Brief description Operational Format Financials (2009) Expected capital expenditure (2010) Geographic coverage (2009) Future plans It is a system of Italian consumers' cooperatives which operates the largest supermarket chain in Italy. Discount Store, Hypermarket/Supercenter/Superstore, Supermarket Revenue: $17.1 billion USD , year-over-year change: NA Operating profit: NA, year-over-year change: NA Net income: NA, year-over-year change: NA NA Croatia, Italy NA
49: Louis Delhaize S.A. (Belgium)**

Operates a chain of hypermarkets, supermarkets, and discount stores in Belgium, Luxembourg, France, the French West Indies, and Hungary. Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Discount Store, Hypermarket/Supercenter/ Superstore, Other Specialty, Supermarket Revenue: $16.1 billion USD, year-over-year change: NA Operating profit: NA, year-over-year change: NA Net Income: NA, year-over-year change: NA NA Belgium, France, French Guiana, Guadeloupe, Hungary, Luxembourg, Martinique, Romania, UK NA
50: eBay Inc. (US)

Operates an online trading community. Their service is used by buyers and sellers for the exchange of products and services. It also offers through a subsidiary a secure online payment service. Online Store Revenue: $9 billion USD, year-over-year change: 2.1% Operating Income: $1.6 billion USD, year-over-year change: (29.6%) Net Income: $2.5 billion USD, year-over-year change: 34.2% $157 million USD US: 45%; Germany: 13%; UK: 12%; Rest of the world: 30% Plans to tap more international markets
Source: Bloomberg and company website ** This company is private and hence data availability is limited
IMAPs Retail Industry Global Report 2010: Appendix A-xi
Thumbnail summaries of retail activities in various regions

1: North America
Brief description Key countries No. of listed retail companies Top 5 domestic companies based on revenues
Largest e-Commerce market with market value of more than 210 billion USD in 2009 combines a high ranking in various areas: online population, percentage of online buyers, and per-capita online spending. US and Canada 637 Wal Mart Stores: $417 billion USD McKesson Corp: $109.4 billion USD Cardinal Health: $98.5 billion USD CVS Caremark Corp: $98.2 billion USD Kroger Co: $79.7 billion USD - The base of Internet users in North America is 266 million users with 77.4 % penetration level, is expected to continue to increase at a steady growth rate of 3% over the next five years (as per internet stats, leading to good potential for online retail market. North America is the highest internet penetrated region in the world with 77.4% penetration rate followed by Oceania/Australia region with 61.3% penetration. - Convenience, value, and selection will remain the primary drivers of growth. The online channel consistently outpaces store growth and withstands shockwaves in the economy because consumers value its low and transparent prices, convenience, and comprehensive assortment.
Current scenario and outlook
2: Europe
Brief description Key countries No. of listed retail companies Top 5 domestic companies based on revenues Second largest market for e-commerce sales with market value of nearly 200 billion USD in 2009. UK, Germany, and France 762 Carrefour SA: $122.1 billion USD Metro AG: $92.4 billion USD Tesco PLC: $90.4 billion USD Ahold NV: $39.7 billion USD Finatis: $38.3 billion USD - The UK is the most mature market. France and Germany have much higher online sales and greater e-commerce activity among Web users than Italy and Spain, where the internet still represents a fraction of total retail volume. This can also be understood from the internet penetration rates which is higher in France (68.9%) and Germany (79.1%) as compared to Italy (51.7%) & Spain (62.6%). - These business-to-consumer (B2C) online sales in Europe are continuing to rise at double-digit growth rate of 11 percent because most European countries online retail sales are still relatively immature. Major growth in Europe will come from the emerging markets of Southern, Central, and Eastern Europe. - Meanwhile, those that are more mature like the UK are witnessing continued growth due to strong online value proposition.
3: Latin America and the Caribbean

Brief description Key countries No. of listed retail companies Top 5 domestic companies based on revenues Current scenario and outlook Emerging region Brazil and Mexico 55 Grazziotin-PREF: $38.7 billion USD Pao Acuca- Pref A: $15.3 billion USD Cencosud SA: $10.6 billion USD Falabella: $7.4 billion USD Distribucion SER: $5.3 billion USD - Growth is expected to be dominated by Brazil which is set to grow from an online spending perspective, as its eCommerce landscape is better developed and per capita online spending tends to be on the higher side .
4: Asia-Pacific, the Middle East and Africa

Brief description Key countries No. of listed retail companies Top 5 domestic companies based on revenues Fastest growing region China, South Korea and India 974 Seven & I holdings: $48.7 billion USD Aeon Company Ltd: $48.6 billion USD Woolworths Ltd: $45.4 billion USD Wesfarmers Ltd: $45.4 billion USD Yamada denki: $21.7 billion USD - By 2014, Asia Pacific will include almost half of the worlds online population, with China taking the clear lead with 42% of online users. Eventually, online spending in China will also continue to outpace across the region rendering it a far larger e-Commerce market overall. - Another two e-Commerce giants in the region, Japan and South Korea, is expected to witness increase in online population by 1% to 2% on an average over the next five years. However, South Koreas highly tenured users are big spenders on digital goods. - The Middle Easts slow internet growth, low credit card penetration and the lack of online stores has left the regions online retail industry lagging behind some of its global peers. However, it is gradually changing.
IMAPs Retail Industry Global Report 2010: Appendix A-xii
Thumbnail summaries of retail activities in various countries

1: Australia
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic retail companies based on revenues Outlook 75% (2009) 70% (2009) $556 USD per capita in 2009 6.5 45 Woolworths Ltd: $45.5 billion USD Wesfarmers Ltd: $45.4 billion USD Metcash Ltd: $10.0 billion USD - Australias retail market size is estimated to be $236.6 billion USD in 2009 and expected to grow in the range of 2-3 percent for the next five years. - Australias e-Commerce market will double in size over the next four years, growing from 12 billion USD in 2009 to $18 billion USD by 2014.
2: Brazil (Metropolitan)
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 48% (2009) 19% (2009) $98 USD per capita in 2009 5.5 19 Grazziotin-PREF: $38.7 billion USD Pao Acuca- Pref A : $15.3 billion USD Lojas-Americ-PRF: $4.9 billion USD - Brazils retail sales for 2009 rose nearly 6 percent in 2009 compared to just over 9 percent in 2008.Going forward, its retail sales is expected to continue at strong growth rate in the range of 8-10 percent. - On online retail front, Brazil has the largest online user base in Latin America and is set to dominate from online business point of view.
3: Canada
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 72% (2009) 48% (2009) $535 USD per capita in 2009 8.8 73 Weston George: $30.3 billion USD Loblaw Companies Ltd: $29.4 billion USD Alimen Couche-B: $17.0 billion USD - Canadas retail market size is estimated to be $285.1 billion USD in 2009 and expected to grow in the range of 1-2 percent for the next five years. - Canada online retail managed to grow 6.8% in 2009 to reach $16.1 billion USD and is forecast to reach $28.7 billion USD by 2014.
4: China (Metropolitan)
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 64% (2009) 37% (2009) $191 USD per capita in 2009 5.7 114 Suning Applian-A: $9.7 billion USD Gome Electrical: $6.8 billion USD Lianhua Superm-H: $3.8 billion USD - Chinas retail market size is estimated to be $184.1 billion USD in 2009 and expected to have robust growth rate of 10-15 percent for the next five years. - China online retail market was valued at $26.0 billion USD in 2009 and is forecast to reach $60.3 billion USD by 2014. It is one of the key emerging e-commerce markets with rapidly growing internet population.
IMAPs Retail Industry Global Report 2010: Appendix A-xiii
5: France
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 64% (2009) 55% (2009) $310 USD per capita in 2009 5.2 44 Carrefour SA: $122.1 billion USD Finatis SA: $38.3 billion USD Rallye SA: $38.3 billion USD - Frances retail market size is estimated to be $519.8 billion USD in 2009 and expected to have a growth rate of 1-3 percent for the next five years. - France online retail market was valued at $13.0 billion USD in 2009 and is forecast to reach $23.7 billion USD by 2014.
6: Germany
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 71% (2009) 70% (2009) $349 USD per capita in 2009 6.8 39 Metro AG: $92.4 billion USD Celesio AG: $31.4 billion USD Praktiker BAU-UN: $4.9 billion USD. With more than $82 million inhabitants, the German market is the largest in Europe; it is very competitive and segmented, with many sectors and products being saturated. Germany online retail market was valued at $24.1 billion USD in 2009 and is forecast to reach $37.7 billion USD by 2014.
8: India (Metropolitan)
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 18% (2009) 7% (2009) $71 USD per capita in 2009 3.5 37 Pantaloon Retail: $2.1 billion USD Shoppers Stop: $305 million USD Vishal Retail: $292 million USD - Indias organized retail market size is estimated to be $16.1 billion USD in 2009 and expected to have robust growth rate of 12-15 percent for the next five years. - India online retail market was valued at $0.23 billion USD in 2009 and is forecast to reach $1.1 billion USD by 2014.
9: Italy
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 51% (2009) 20% (2009) $281 USD per capita in 2009 5 8 Gruppu Coin SPA: $1.9 billion USD Marr SPA: $1.5 billion USD Ciccolella SPA: $493 million USD - Italys retail market size is estimated to be $550.8 billion USD in 2009 and expected to have a growth rate of 1-3 percent for the next five years. - Italy online retail market was valued at $3.5 billion USD in 2009 and is forecast to reach $6.3 billion USD by 2014.
10: Japan
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook
79% (2009) 88% (2009) $500 USD per capita in 2009 7 379 Seven & I holdings: $48.7 billion USD Aeon Company Ltd: $48.6 billion USD Yamada Denki: $21.7 billion USD Japan, the e-Commerce giant in Asia Pacific region, will see online population increases of 12% on average over the next five years.
IMAPs Retail Industry Global Report 2010: Appendix A-xiv
12: The Netherlands

Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 81% (2009) 70% (2009) $321 USD per capita in 2009 9.1 7 Ahold NV: $39.7 billion USD Mediq NV: $3.5 billion USD Sligro Food Group: $3.2 billion USD - The Netherlands retail market size is estimated to be $115.1 billion USD in 2009 and expected to grow in the range of 3-5 percent for the next five years. - The Netherlands online retail market was valued at $4.3 billion USD in 2009 and is forecast to reach $7.2 billion USD by 2014.
14: South Korea

Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 76% (2009) 94% (2009) $653 USD per capita in 2009 7.7 35 Lotte Shopping: $12.6 billion USD Shinsegae Co Ltd: $9.0 billion USD Daewoo Motors SAL: $2.5 billion USD - South Koreas retail market size is estimated to be $100.1 billion USD in 2009 and expected to grow in the range of 5-7 percent for the next five years. - South Korea online retail market was valued at $18.3 billion USD in 2009 and is forecast to reach $28.2 billion USD by 2014. It is an emerging e-commerce powerhouse with highly tenured users and big spenders.
15: Spain
Online Penetration Percentage of online buyers Average online spending Average online tenure (years) No. of listed retail companies Top 3 domestic companies based on revenues Outlook 58% (2009) 31% (2009) $307 USD per capita in 2009 5.4 5 Inditex: $16.2 billion USD Adolfo Dominguez: $246 million USD Funespana SA: $100 million USD - Spains retail market size is estimated to be $240.9 billion USD in 2009 and expected to grow in the range of 1-2 percent for the next five years. - Spain online retail market was valued at $2.6 billion USD in 2009 and is forecast to reach $6.4 billion USD by 2014.
Source: Bloomberg, Frost & Sullivan, Forrester Research
IMAPs Retail Industry Global Report 2010: Appendix A-xv
Appendix B: Summary of M&A transactions1 in the retail sector

The retail sector saw 1409 deals valued at 17.1 billion USD in LTM ending September 2010, representing a downside of 33.6% in terms of deal value (25.7 billion USD during the previous period with 1,473 deals). Dollar volume in this period included two major deals (Kohlberg Kravis Roberts/Pets at Home and Lotte Shopping Co/GS Square and GS Mart); which represented 2.7 billion USD or nearly 15.8 percent of total dollar volume. During the previous period, the largest deal was the acquisition of Next Rx LLC by Express Scripts for 3.5 billion USD.
Particulars
Total number of deals Deals with available transaction value Total transaction value Largest deal Top 5 deals as a % of total deal value
LTM ending September 2009

1473 479 $25.7 billion USD Express Scripts acquired Next Rx for $3.5 billion USD 32.4%
LTM ending September 2010

1409 375 $17.1 billion USD Kohlberg Kravis Roberts acquired Pets at Home for $1.5 billion USD 26.9%
In terms of business segment, specialty and distributors accounted for the highest in terms of value at nearly 56 percent of total dollar volume for the period.
Top Five Segments

Specialty Stores Distributors Department Stores General Merchandise Stores Home Furnishing Retail
No. of transactions
300 692 50 28 38
Value (USD bn)

5.3 4.4 2.4 1.6 1.0
In terms of geography, UK had the highest transaction value of $3.9 billion USD with a total of 161 deals in the last 12 months. The US came in second with a value of $3.4 billion USD through 370 deals. Among regions, Europe was the clear leader at $7.3 billion USD with 688 deals.
Top Five Countries

United Kingdom United States South Korea France China
No. of transactions
161 370 3 87 66
Value (USD bn)

3.9 3.4 1.2 1.0 0.9
Top Five Regions

Europe North America Asia Pacific Latin America and Caribbean Middle East
No. of transactions
688 412 245 37 13
Value (USD bn)

7.3 4.1 4.1 1.6 0.2
1 Only mergers and acquisitions have been considered. Source: Capital IQ
IMAPs Retail Industry Global Report 2010: Appendix B-i
Summary of transactions1 in the retail sector in LTM ended September 2010

# of Transactions LTM ended Sept. 2010 # of Transactions LTM ended Sept. 2010 Total Transaction Value in USD mn Total Transaction Value in USD mn
Average EV/ Revenue (x)
Average EV/ EBITDA (x)
Average EV/ EBIT (x)
Average EV/ Revenue (x)
Average EV/ EBITDA (x)
Country
United Kingdom United States South Korea France China British Virgin Islands Canada Japan Australia Bermuda Greece Austria Ukraine Hong Kong Malaysia Colombia Netherlands Denmark Switzerland Italy Spain Belgium Singapore Ireland Israel Indonesia Turkey Germany Sweden Poland Brazil Norway India Lithuania Vietnam Thailand South Africa
Country
Argentina Estonia New Zealand United Arab Emirates Russia Liechtenstein Sri Lanka Taiwan Philippines Cyprus Finland Czech Republic Mexico Croatia Hungary Kazakhstan Romania Belarus Bulgaria El Salvador Latvia Slovenia Zimbabwe Burundi Chile Dominican Republic Egypt Kenya Mauritania Mauritius Namibia Nigeria Panama Peru Portugal Slovakia Syria
161 370 3 87 66 6 42 33 37 1 5 13 20 19 25 3 27 27 22 36 31 9 15 6 5 5 5 70 34 16 12 16 14 2 4 5 6
3895.7 3373.9 1153.4 1071.6 899.1 557.0 772.2 761.6 617.2 525.3 441.5 321.3 310.5 243.3 240.4 240.0 223.3 201.7 192.9 175.0 111.8 109.1 97.0 86.7 80.5 74.6 67.1 44.3 31.8 25.9 25.2 23.6 13.5 10.8 7.4 6.3 5.4
0.8 1.4 1.0 0.6 1.1 0.8 0.4 0.3 0.3 1.6 5.0 3.5 1.1 0.9 0.6 1.8 1.3 0.4 0.1 2.9 0.2 0.2 -
12.9 15.9 11.7 37.6 6.6 19.3 7.9 8.8 7.0 5.9 5.8 3.5 -
12.0 29.9 11.5 73.0 26.0 58.1 4.7 9.8 11.7 10.3 17.8 0.6 -
3 4 10 2 43 1 1 3 2 1 26 10 5 4 4 3 3 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1
3.0 2.9 2.9 2.5 1.7 1.2 1.0 0.6 0.2 0.1 -
5.3 2.9
9.7 13.3
Average EV/ EBIT (x)
29.7
Total
1409 17054.3
Source: Capital IQ M&A Database 1 Only Mergers and Acquisitions have been considered
IMAPs Retail Industry Global Report 2010: Appendix B-ii
Top 10 transactions in the retail sector (LTM)

1: Kohlberg Kravis Roberts / Pets at Home
Announced/Initial Filing Date: Target/Issuer: Total Transaction Value ($mm USD) Buyers/Investors: Percent Sought (%): Implied Enterprise Value/Revenues: Implied Enterprise Value/EBITDA: Implied Enterprise Value/EBIT: Headquarters-Country: Primary Industry: 1/27/2010 Pets at Home Ltd. 1546.93 Kohlberg Kravis Roberts & Co. 100 2.37 13.64 United Kingdom Specialty Stores COMMENTS: KKR, a private equity firm and a leveraged buyout specialist, whose retail investments include Alliance Boots, the health and beauty group, has acquired the UK's largest pet supplies retail chain, Pets at Home, from rival buy-out firm Bridgepoint Capital. Pets at Home is the UKs largest pet accessories retailer having over 240 stores, and operates 54 veterinary centers. The company had enjoyed rapid growth and has a significant potential to grow further, and was the key reason for the acquisition.
2: Lotte Shopping Co / GS Square and GS Mart

Announced/Initial Filing Date: Target/Issuer: Total Transaction Value ($mm USD) Buyers/Investors: Percent Sought (%): Implied Enterprise Value/Revenues: Implied Enterprise Value/EBITDA: Implied Enterprise Value/EBIT: Headquarters-Country: Primary Industry:
2/9/2010 GS Square Co., Ltd and GS Mart Co., Ltd. 1153.25 Lotte Shopping Co.
100
COMMENTS: Lotte Shopping purchased mega mart and department store units of GS retail, making room for expansion and growth in the already saturated industry. The acquired departmental stores will create synergy [in business] with existing stores, and Lotte will maintain its top position in the industry.
0.978 South Korea Department Stores
3: Advent International Corporation / DFS Furniture

4/22/2010 DFS Furniture Company plc. 767.00 Advent International Corporation.

100
COMMENTS: Advent International is a global private equity firm. DFS has grown to become the number one brand in the UK sofa market with sales of more than three times its nearest competitor. Advent has been investing in the retail, consumer products and leisure sectors since 1984 and this is their strategic expansion model..
United Kingdom Home Furnishing Retail
4: Casino Guichard / Franprix and Leader price

11/12/2009 5% Franprix and 25% Leader Price. 637.18 Casino Guichard Perrachon & Cie SA.
100
COMMENTS: By acquiring remaining 5% in Franprix and 25% in Leader Price, Casino Guichard now has full control of both companies. This transaction would allow the company to reduce its debt and will give increased financial flexibility.
0.102 France General Merchandise Stores
5: Sears Canada Holdings / Sears Canada Inc

4/22/2010 Sears Canada Inc. 559.16 Sears Canada Holdings Corp. 17.34 0.423 4.41 5.67 Canada Department Stores
COMMENTS: Sears Canada Holdings purchased a total of 18,660,880 common shares of Sears Canada Inc. from Pershing Square, L.P., Pershing Square II, L.P. and Pershing Square International, Ltd. They now beneficially own an additional 18,660,880 common shares. The acquisition is considered to be an attractive investment.
IMAPs Retail Industry Global Report 2010: Appendix B-iii
6: Dufry AG / Dufry South America

1/10/2010 Dufry South America Ltd. 525.31 Dufry AG. 48.96 1.55 7.87 9.82 Bermuda Specialty Stores
COMMENTS: The merger of a parent company Dufry group with Dufry South America is basically to establish a simplified corporate structure with a unified shareholder base, allowing it the flexibility to seize growth opportunities.
7: Esprit Holdings / Glory Raise

12/17/2009 Glory Raise Limited. 500.25 Esprit Holdings Ltd. 100 British Virgin Islands Distributors
COMMENTS: Esprit China Distribution Ltd (Esprit China), a whollyowned unit of Esprit Holdings Ltd, acquired the entire share capital of Glory Raise Ltd from Tactical Solutions Ltd. Esprit Holding has acquired Glory Raise as its focus is on reinforcing its market leadership in its core consumer businesses, namely retail, beverage, food processing and distribution, wherein Glory Raise is a wholesaler and retailer of apparel.
8: GSI Commerce / Retail Convergence

10/27/2009 Retail Convergence, Inc. 350.00 GSI Commerce Inc. 100 4.22 United States Internet Retail
COMMENTS: GSI Commerce Inc is the leading provider of e-commerce and interactive marketing services and Retail Convergence Inc is a Massachusetts-based company that operates RueLaLa.com, a leader in the private sale space and SmartBargains.com, an off-price e-commerce marketplace. Hence, this acquisition will give an innovative global e-commerce platform to GSI Commerce.
9: Warburg Pincus / Poundland Ltd

5/4/2010 Poundland Ltd. 302.32 Warburg Pincus LLC. United Kingdom General Merchandise Stores
COMMENTS: Warburg Pincus had bought Poundland, a British discount retailer, which holds the leading position in the high-growth, single-price discount-retailing market in the UK. Warburg has considered this deal looking at the immense growth potential expected of the discount stores in upcoming years.
10: TNK-BP / Vik Oil Group

12/31/2009 Vik Oil Group. 294.00 TNK-BP Ltd. 100 Ukraine Specialty Stores
COMMENTS: TNK-BP is a vertically integrated oil company with a diversified upstream and downstream portfolio in Russia and Ukraine. TNK group has consistently invested in the development of its retail network and the acquisition of Vik Oil is also part of their development plan.
IMAPs Retail Industry Global Report 2010: Appendix B-iv
Appendix C: Growth drivers of online retail industry

The Internet has evolved into an important retail channel, with millions of online consumers across the globe turning to it to make their purchases. Despite the financial crisis and recession, the Internet and other new channels continue to drive long-term shifts in consumers purchase behavior and the way products and services are distributed. Convenience, value, and selection key catalyst for growth: The online retail channel has consistently outperformed in comparison to store growth and weathered the recession well because most consumers are valuing low and transparent prices, convenience, and comprehensive assortment of goods and services. As per the survey1 conducted in the North American region which is the largest market for online retail, 67 percent of online buyers find the products online that they cannot find in stores easily; 65 percent of the US-based Web buyers buy the products online as they save time by shopping online, and 63 percent of Web buyers find better deals online. Increase in global internet penetration: Between 2005 and 2009, the global Internet population increased from 1 billion to more than 1.6 billion and by 2014, it is projected to grow by another 42 percent, reaching a level of 2.3 billion2. While Internet penetration growth does not have a direct relationship with online retail market growth, online retail market dynamics change as the global internet penetration changes. Also, rapid expansion in online population boosts international expansion for most retailers. - Most of the growth in online population is expected to come from Asia Pacific, Middle East and Africa regions, which has a very low internet penetration level of 19.7 percent as of June 2010. These regions will represent 54.9 percent of the online population in 2014. Compared to this, developed regions such as North America and Europe will represent 34.1 percent of total population in 2014 against their proportion of 41.3 percent in 2009. - Other emerging Asian countries such as Vietnam and Indonesia are expected to have nearly 10 percent of global online users by 2014, but Apple is the only online retailer in the US which operates a transactional Web site for these countries. - Furthermore, the level of adoption of online shopping does not always reflect the level of online spends. For example, North America has one of the highest online spending rates
1 North American Technographics Retail Online Survey, Q3 2009 (US) 2 Forrester Research, September 2010
per person, while the overall penetration of online buyers is relatively low compared with other markets. On similar lines, Asian e-Commerce giants such as Japan and South Korea are climbing the levels in online spending because of improved access through technology and wider selection of online stores. These new online shoppers today certainly enjoy a far richer eCommerce experience than the consumers had 10 years ago. - Altogether, the market potential is huge. Online retailers who want to capture the growing number of online users and their growing funds spent online will need to look beyond the markets of North America and Europe and think globally about their online strategies. Region wide/customized strategy: In simple words, localization is expected to boost the online retail market. Traditionally, there was a tendency among online retailers in terms of not changing content according to local requirements and languages. This strategy had its disadvantages in terms of repelling customers who were not comfortable with the english language and standard layout across the globe. It catered largely to English-speaking markets. However, nowadays, online retailers are adopting the strategy of Localization i.e. websites into local languages along with regional customs even if with a small amount of content at first. These retailers are better equipped to take the advantage of an increasingly diverse global online user base than their counterparts with English-only Web sites. - There is a strong preference for local-language content in European markets like France, while more than 95% of online users indicate a preference for local-language content in Asian markets like Japan and Korea3. And while 5% of the global population speaks Arabic, just 1% of online content is estimated to be available in the language. - Similar to local language preference, customer behavior and expectations also vary across countries. A more customized online strategy is required for regions like the Middle East or Latin America. Indeed, companies have started operating such online initiatives tailored to individual markets in the region along with a local office in the country. - Strategies of localizing content and understanding online customer behavior and preference are likely to boost online sales.
3 Asia Pacific Technographics Survey, Q4 2009
IMAPs Retail Industry Global Report 2010: Appendix C-i
Appendix D: Niche focus areas

M-Commerce (Mobile commerce)1
- A number of retailers and third-party developers have introduced mobile applications that give consumers powerful new shopping tools and added convenience. But most retailers are either standing on the sidelines or in the midst of planning their mobile commerce strategy2. - m-commerce which began in the last decade, similar to mobile banking, has expanded very little. Despite the massive numbers of mobile users in the US and UK, those using their phones to make purchases is still few. Tepid demand among consumers, technological limitations and lack of standardization in application has constrained the widespread proliferation of m-commerce. Currently, web-enabled mobile phone users are using their devices to get weather forecasts, read news, find movie times and bank online than to buy products. - While m-commerce is still immature and the least commonly preferrred customer service channel, retailers are showing interest in this channel with the idea of getting support from mobile commerce and promotional efforts. As per a study by the National Retail Federation in the US, 74 percent of online retailers either have in place or are developing mobile commerce strategies, while 20 percent have already implemented their complete plans. - Also, people who download mobile applications, including shopping apps, are a highly coveted consumer segment. Mobile buyers tend to be repeat purchasers with a higher order value than the average consumer, and it can be important for them to complete transactions with ease even if it means spending more. As per mobile payments firm Billing Revolution, on-the-go consumers are happy to purchase small-ticket items like pizza and movie tickets through the mobile. According to Millennial and comScore research, there is a new retail audience that can only be reached through mobile and that means it is imperative to invest now in mobile for this holiday season or risk missing out on revenue that can only be tapped through mobile in 2010. - Hence, a number of recognized retail brands have launched mobile commerce programs so they can be where their customers go. In m-commerce, eBay is the outstanding leader with their iPhone application launched in 2008, and Blackberry and Android applications that launched in 2009 and 2010. In 2009, the company saw more than 600 million USD in goods sold via the mobile application, which was a 200 percent increase from 2008. On new launch, MLB Advanced Media, the Philadelphia Phillies and Aramark have started allowing consumers to use their iPhone to order food and have the items delivered to their seat. Sears has effectively used mobile for customer service by sending text alerts to confirm that a Web order is ready for in-store pickup and allowing customers to contact customer service via their mobile device by SMS, phone, or email.
1 M-commerce is the buying and selling of goods and services through wireless handheld devices such as cellular telephone and personal digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users to access the Internet without needing to find a place to plug in. 2 eMarketer Research - Mobile Commerce: Ahead of Its Time
- Going forward, by 2015, shoppers from around the world will spend about 119 billion USD on goods and services bought via their mobile phones3. In the US alone, mobile shopping rose from 396 million USD in 2008 to 1.2 billion USD in 2009, and is forecast to reach about 2.2 billion USD in 2010.
Online grocery shopping

Online grocery shopping has continued to experience a rapid evolution in recent years, facilitated by the ongoing development of the internet and related technologies such as mobile communications. From a consumer perspective, the convenience factor of placing an order online and having goods delivered to the door is perhaps the biggest appeal to consumers looking for ways to save time or have physical difficulty of carrying products. - The UK is the most developed online grocery market globally, with 15 percent of adults who have shopped for their groceries online in 2009. The UK market had grown at a CAGR of 24.9 percent during the period of 2004 to 2009, reaching a level of 7.8 billion USD in 2009 and with expectations of reaching 11.8 billion USD by 20144. Another major market is the US, which is also catching up with online grocery shopping habits. With its vast online population, the US tops the online grocery shopping arena with a total market size of 9.1 billion USD in 2009. However, the per capita spending is still less for US consumers when compared to the UK market. - However, one key difference with grocery products is freshness: many consumers still prefer to see the produce before purchase, which remains a significant hurdle for the development of the online market. Furthermore, the time lag between placing the order and delivery means that online grocery purchasing only fits with regular, planned shopping rather than impulse or top-up shopping.
Online healthcare
Online healthcare helps online consumers: Nowadays, healthcare consumers gather information online which includes healthcare related information and services, looking for doctors, researching medicines, sharing personal health details and tracking health conditions for themselves. While consumers are becoming more self-reliant and empowered, healthcare providers are beginning to offer their services online and learning how to become more consumer-focused. - Given this evolution, online healthcare marketers in the US have the opportunity to build a bridge between healthcare providers and patients. It is estimated that the market for Electronic Health Records will reach about 5 billion USD, by 2015, according to Kalorama Information. In order to capture this vast potential, Google and Wal-Mart have together invested significantly in online healthcare services.
3 Study by ABI Research 4 Datamonitor Research
IMAPs Retail Industry Global Report 2010: Appendix D-i
IMAPs Retail Team
Brazil
Ludimila Mangili ludimila.mangili@imap.com
Germany
Wolfgang Thiede wolfgang.thiede@imap.com Mathias Weidner mathias.weidner@imap.com
Spain
Jos-Mara Alber B. josemaria.alberu@imap.com
United Kingdom
Marc Gillespie marc.gillespie@imap.com Gareth Iley gareth.iley@imap.com
Finland
Svante Degerth svante.degerth@imap.com
Sweden
Jan-Olof Svensson janolof.svensson@imap.com
Norway
Asbjoern Myrlund asbjoern.myrlund@imap.com Jens Langebrekke jens.langebrekke@imap.com
For a comprehensive list of IMAP advisors and to discover how IMAP can help you with your M&A transaction, go to www.imap.com.
Cross-border M&A requires local knowledge and experience. IMAP advisors located around the world have successfully completed thousands of M&A transactions. Let IMAP help you with your M&A project in 2010.
Other industry reports available from IMAP: Automotive & Components Global Report, 2010 Alternative Energy Industry Global Report, 2010 Computing & Internet Software Global Report, 2010 Food & Beverage Industry Global Report, 2010 For copies, visit the Industries page of www.imap.com.
www.imap.com
COPYRIGHT 2010 IMAP, INC. THIS REPORT AND THE INFORMATION HEREIN IS THE EXCLUSIVE DOMAIN OF IMAP AND MAY NOT BE USED OR REPRINTED WITHOUT PERMISSION. CONTACT INFO@IMAP.COM.

Retail Industry Global Report - 2010: An Imap

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An IMAP RETAIL Report

Retail Industry Global Report 2010

RETAIL INDUSTRY GLOBAL REPORT 2010

An IMAP RETAIL Report

IMAPs Retail Industry Global Report 2010: Page 1

2010 witnesses contraction in retail M&A activity

M&A Activities at a Glance

Source: Capital IQ Database, IMAP

IMAPs Retail Industry Global Report 2010: Page 2

Global recession hit retail hard

Change in consumer preference fuels online retail

Traditional vs. Online Retail Industry Growth

Traditional Retail Growth Online Retail Growth

IMAPs Retail Industry Global Report 2010: Page 3

Increase in global online population promotes online retail spending

Global Online Population

Latin America and Caribbean

Source: Forrester Research Inc. and Internetworldstats.com, June 2010

Along with penetration, localization strategy also supports online retail

IMAPs Retail Industry Global Report 2010: Page 4

Transformation in online retail

New Developments in E-commerce

Multiple Devices User-generated Content

Todays E-commerce Solutions

Post recession, consumers believe in smart shopping and smart-store theme

Multi-channel Retail Strategy

1 Survey conducted by comScore, July 2010

IMAPs Retail Industry Global Report 2010: Page 5

Cross-border online purchases are booming

Financial analytics becoming integral part of operational strategy3

1 eMarketer 2 Forrester Research 3 http://www.ecommercetimes.com

4 Forrester Research Survey 5 Forrester Research

IMAPs Retail Industry Global Report 2010: Page 6

Types of Consumer-Generated Media

Emergence of Social Media in Retailing

Ratings & Review Sites

Video Audio Blogs Marketer Blogs

Discussion Forums Groups

Mobile Blogs Video Blogs

IMAPs Retail Industry Global Report 2010: Page 7

Major hurdles to globalization of online retail

Examples of Legal Restrictions

List of Items Prohibited

IMAPs Retail Industry Global Report 2010: Page 8

Online grocery shopping

Mobile Commerce (M-Commerce)1

IMAPs Retail Industry Global Report 2010: Page 9

Global Retail Sales

Source: EIU, August 2010 1 EIU

IMAPs Retail Industry Global Report 2010: Page 10

Appendix A: Global overview of retail and online retail

Retail Value Chain

Source: Image taken from Microsoft website

Major formats of in-store retailers

Major formats of non-store retailers*

IMAPs Retail Industry Global Report 2010: Appendix A-i

Global Overview of Retail Sector

Rise of online retailing

IMAPs Retail Industry Global Report 2010: Appendix A-ii

Thumbnail summaries of top 50 retail companies

2: Carrefour S.A. (France)

3: McKesson Corp. (US)

4: Cardinal Health. (US)