Asian retailers throw down the gauntlet amid cross-border expansion
After rapid contraction in the face of growing online sales, the demise of many legacy retail groups in Europe and the US and a major shakeup of a number of retail categories, from department stores to music outlets, retailers have generally been back in expansion mode over the past two years.
Yet that expansion has largely been cautious and hugely selective, by location and market, meaning that vacancy rates have generally stabilised but the wider rollouts of the past have looked to be a thing of the past.
At MAPIC that unwritten rule was torn up as a number of Asian brands outlined their expansion strategies and desire to open stores at breakneck speed.
Lifestyle retailer and MAPIC exhibitor Miniso has been on a determined global growth trajectory. Having debuted in China in 2013, it has since grown to around 8,000 stores in 111 markets and has heading towards 500 European stores. In home improvement and value hardware, Malaysia’s Mr DIY has opened more than 5,200 outlets since its formation in 2005 and has expanded into 14 markets, opening 1,000 stores last year and on target for 1,200 stores this year.
Children’s wear group Balabala has more than 4,500 stores in mainland China and Hong Kong and it has expanded into more than 20 markets, opening over 100 stores and with its first European stores to open in Italy next year. And Xiaomi, best known for smartphones and consumer electronics, is looking to open roughly 10,000 new Mi Home stores over the next five years and has pivoted into the electric vehicle market.
Looking globally, retailers from all the key markets are looking to opportunities across the world and despite the backdrop of unpredictable tariffs have proven open to international opportunities. Yet selectivity is very evident.
“Retailer demand is absolutely laser focused on the right products; retailers will not look at a property having challenges with ceiling heights, too many columns, not enough frontage, they won’t take that space. So, we’re going see some rental growth but also a lot more proactive asset management from landlords”, Savills Co-Head of Global Retail Sam Foyle said.
Colliers launched a global retail report at MAPIC and Colliers Co-Head of Retail Practice Niccolo Suardi also pointed to the return of core capital after an absence in the post-pandemic years. He believes that this may well signal that we are seeing the beginning of a new cycle, with a wider diversity of investment.
“This also means that investors can see the potential for stronger rents and certainly at the very least we have seen assets stabilised” he said. “What we are seeing however is that occupiers are being very selective, with brands being more careful and doing a lot more research before they take a store or enter a new market.”
He also noted that while US brands have become increasingly active in Europe, the same is true of European retailers looking to North America for opportunities.
Indeed, US brands were also active at MAPIC, including some of the country’s biggest players, now looking for international growth.
Costco, the US club membership giant, which entered the UK in 1993, continues to look for growth opportunities in Europe, with more large format stores set to open in Spain, France and Sweden, which are all target expansion markets.
“Our focus is on existing markets and we are quite unique in needing large sites for our big box format”, Costco Real Estate Director EMEA and APAC James Cheesemore said.
Earlier this year, Dine Brands Global combined two of its major restaurant brands, IHOP and Applebee’s, into one brick-and-mortar location, with a dual-branded offer that it is now expanding beyond North America. The company is looking for franchise partners for its launch in Europe, which started at MAPIC, and in Asia, while it already has a presence in Dubai.
“Over the next 12 months, we’re focused on accelerating our international expansion, with plans to double our restaurant footprint in the coming years. Europe remains a key priority, particularly in France, Spain, and the UK, where we see strong market potential. We’re also open to evaluating opportunities in other European countries”, Dine Brands Senior Manager International Development Marcel Portmann said.
