A recent paper by Philip Baker and Sharon Friel of the Regulatory Institutions Network of the Australian National University puts the development and relative underdevelopment of Asia Pacific’s organised retail sector in stark perspective.
APAC: Share of Total Sales of Processed Foods Via Modern Grocery Channels, 1999-2013
Source: Transnational food and beverage corporations, food systems transformations and the nutrition transition in Asia, Philip Baker and Sharon Friel, Australian National University (2015)
As expected, Australia, Japan, New Zealand, Singapore and Korea have relatively well-developed organised retail sectors, measured by the share of processed foods through modern retail channels such as forecourt retailers, convenience stores, hypermarkets and supermarkets.China has shown rapid development between 1999 and 2013 as the economy and retail demand has exploded.
In contrast, Vietnam, India, Malaysia and Indonesia are relatively underdeveloped, hinting at strong potential growth in the future. To an extent, the four countries’ status in the region can be explained by inadequate infrastructure to support a vibrant modern retail sector. However, to a large extent this also reflects restrictions on investment from foreign retailers, a subject recently discussed in the context of India.
With much to gain from opening to organised retail, better quality standards, increased employment and increased choice for consumers, governments in the region should seriously think about how they regulate the sector and govern investment. Recent news that the Indian government is consulting with major players, such as Amazon and Flipkart, on how to manage its retail policy is good news and can be an example of how to proceed for other high potential countries in the region.