SINGAPORE - A quarter of the world's biggest retailers by revenue now hail from the Asia Pacific but they are still slow in going global, according to a study by professional services group Deloitte.
The study, Global Powers of Retailing 2018, showcased a list of the top 250 companies by retail value and found 63 of those companies came from the Asia-Pacific region. Europe's share of the top 250 dropped for a second year running to 82 companies, while the US accounted for 80.
In terms of revenue, Europe saw its share of the top 250 fall to 33.8 per cent from 39.4 per cent because of slow-growing European economies and Brexit while North American retailers continued to hold almost half (47.8 per cent) of the pie.
Asia-Pacific retailers' share increased to 15.4 per cent share in 2016 from 10.4 per cent in 2006.
Yet even though the footprint of the region's retailers' has grown, Deloitte noted that they have been relatively slow to invest in international operations.
Asia-Pacific retailers on average operated in just 3.6 countries, compared with the top 250 average of 10 countries. Nearly half of the companies operated only within their own borders, with 90 per cent of the combined revenue for the region's 63 retailers generated domestically in 2016, Deloitte said.
This contrasts with European retailers who remained the most globally active, with 85 per cent of them operating internationally and accounting for 41 per cent of combined revenue generated from foreign operations, almost twice as much as the top 250 group as a whole.
French retailers had by far the most global retail networks, with operations on average in 30 countries.
Among Asia-Pacific retailers, Japanese supermarket chain Aeon and 7-Eleven owner, Seven & i Holdings, came out tops.
However, the region was dominated by retailers from China and Hong Kong, who saw the region's strongest combined revenue growth of 7.5 per cent in 2016, coming on top of 12.9 per cent growth the previous year. Their top-line focus came at the expense of profit as they saw a combined net profit margin of just 1.1 per cent, well below the top 250's overall results.
China's largest retailer, JD.com, weighed heavily. If the fast-growing but unprofitable e-commerce giant is excluded from the analysis, China/Hong Kong's combined growth rate would drop to just 0.5 per cent, said Deloitte.
American retailer Walmart continued its long-held dominance as the world's largest retailer with US$485.9 billion (S$638.4 billion) of retail revenue in 2016.
In total, the top 10 companies accounted for 30.7 per cent of the top 250's retail revenue. The big gainer among the Top 10 was e-commerce retailer, Amazon, up four places to sixth with a retail revenue growth of 19.4 per cent.
The top 250 global retailers generated combined revenues of US$4.4 trillion in fiscal year 2016, representing growth of 4.1 per cent from the previous year.
