Posts Tagged ‘regionalisation’

Maybe the downturn isn’t a slow down

January 6, 2009

Getting back to work and catching up on emails, I was struck by the ongoing pace of internationalisation in the retail sector, despite the much-discussed global economic downturn. Many of the big players have been busy expanding their empires (while a few others have been struggling).

I am on the mailing list of a mob called Planet Retail, and they send out a daily newsfeed. Over the past month alone, here are the various international expansion moves they have mentioned (both new FDI and also significant within-host country investments):

  • Office Depot (US) and partner Gigante (Mexico) into Colombia
  • Wal-Mart (US) building stronger ties to Russia with an eye to open stores some time
  • Wal-Mart (US) definitely into Chile
  • Quiznos (US) into Venezuela
  • RadioShack (US) buying out Mexican partner
  • KFC and Pizza Hut (US) into Moldova
  • Costco (US) contemplating France, Spain and India
  • Costco (US) definitely into Australia

  • Hamleys (UK) into Russia
  • Alliance Boots (UK) expanding operations in Norway
  • Aldi (German) into New York City
  • Auchan (France) expanding operations in Romania
  • Metro Cash and Carry (Germany) expanding Indian operations into Punjab
  • Schwarz Lidl (Germany) into Bulgaria
  • Tesco (UK) expanding Chinese operations into Shandong
  • Rewe (Germany) expanding Russian operations
  • Woolworths (Australia) potentially into India
  • Lotte (Korea) into Vietnam
  • Best Denki (Japan) into Kuwait
  • Yamada Denki (Japan) into China
  • Quanjude (China) into Taiwan

I have listed them by the home continents of the expanding firms. As you can see there is a pretty even mix of countries in terms of home and host here. Most interestingly from the perspective of a researcher who looks at the geographic reach of multinationals, a good proportion of these moves have been outside of these firms’ home regions (as typically defined). I have highlighted these moves in green. Given retailing is one of the less-internationalised sectors in the global economy, it is fascinating that such expansion continues to occur.


So much for the global consumer

December 5, 2008

One of tenets of the more extreme globalisation mantra is that we have all developed similar buying patterns and firms can thus treat us as global consumers. This little grab from the New York Times, and the accompanying nifty world maps, show otherwise. The article claims that:

“Greeks spend almost 13 times more money on clothing as they do on electronics…[while] Australians spend only 1.4 times more cash on clothes than they do on consumer electronics.”

boot2This has very big implications for the internationalisation decisions of large multinationals. Certain countries become more attractive than others – although the choices are not as clear cut as one might think.

If you are LG or Nintendo do you chase the potentially already sated Aussie consumer, or the yet-to-be-convinced Athenian?

What is unfortunately difficult to visually gauge from the graphs, but is presumably more accessible from the Euromonitor data, is how different the country-level buying behaviours are product-to-product within the Triad regions. This would help get at some of the still contested issues within the regionalisation debate (see this paper by Tom Osegowitsch and I for an insight into this discourse). If, for example, Spaniards are more like Brazillians than Germans in their consumption patterns, and Aussies more like Canadians than Malaysians, where does that put the notion of regional strategies? Will firms really stay close to home geographically, if proximity of tastes is not correlated?

Finally, as an Aussie, I must take umbrage with this quote in the New York Times piece:

“In Australia, what else do you need besides a bathing suit and a pair of Uggs?”

That’s not a mental image any of us would like to think too hard about!