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This Continent Could Be Retail’s Next Gold Rush

Growth in Asia is slowing, and Africa is emerging as the next big retail hotspot.

Kearney’s Global Retail Development Index (GRDI) tracks selected emerging retail markets around the world. The consulting firm queried retailers to find out what they’re thinking in terms of entering new markets, and expanding in emerging markets even if their investments aren’t yet yielding returns. It also asked how retailers evaluate the potential of to succeed with modern retail concepts in nations still dominated by informal or traditional vendors.

China and India are still ranked No. 1 and No. 2, respectively, for market attractiveness, country risk, market saturation and time pressure. Malaysia ranked third, with Indonesia, Bangladesh, Morocco, Egypt, Ghana, Vietnam and the Dominican Republic rounding out the top ten. Other nations in the group of 35 include Serbia, Saudi Arabia, United Arab Emirates, Jordan, Bulgaria, Guatemala, Sri Lanka, Paraguay, Cameroon and The Philippines, to name a few.

The 2021 GRDI report also presumes that emerging markets experience four stages of retail development: opening, peaking, declining and closing. Opening periods have growing middle classes, while the peaking phase sees consumers actively seeking out modern, organized retail formats that offer access to global brands. Consumer spending expands significantly during the maturing phase, while the closing phase sees consumers already accustomed to modern retail formats and alternative channels. Discretionary spend is higher and competition from both local and foreign retailers is intense.

Below are the highlights from select emerging markets in the Kearney report.

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The global population is expected to increase by 2 billion by 2050, and growth in several African nations—Ethiopia, Ghana, Cote d’Ivoire, Rwanda, Kenya, Senegal and Morocco—is expected to outpace both the regional expansion and the world average. Separately, sub-Saharan Africa (SSA) is expected to double by 2050, with Nigeria projected to become the third-largest country in the world. The populations of the Democratic Republic of the Congo, Ethiopia, Tanzania and Egypt are also expected to grow rapidly.a

The population growth will result in young, urban and more affluent residents, driving Africa’s potential as a key emerging retail market. Moreover, SSA is expected to enjoy the highest global rate of disposable income growth, at about 9 percent CAGR (compound annual growth rate).

While widespread challenges remain—including corruption, rampant poverty, security concerns, supply chain issues, lack of infrastructure, and archaic governmental retail policies and practices—the Kearney report noted that the potential is real as SSA has the planet’s lowest rate of intra-regional trade. Modern retailing is currently dominated by regional players, primarily South African operators. The paucity of international players makes the continent one of the least developed, and therefore offers rich investment opportunities for overseas retailers.

Retailers in Africa are supporting local communities and suppliers, while grocery retailing is the category that’s witnessing rapid digitization. E-commerce accounts for just 1 percent of the total African retail market, but rising smartphone use by an emerging middle class should fuel digital growth. “South Africa, Nigeria, and Kenya currently dominate the e-commerce landscape, although the digital marketplaces in Ghana and Morocco are rapidly expanding,” the Kearney report noted.


China has two marketplaces. One is modern, developed, urban and sophisticated. The other is more traditional, and often more rural. While retail in China leads the world in technology, the Kearney study found the country falls short on other indicators, such as per capita income and institutional stability. China’s 8 percent economic growth rate is expected to slow to 5.4 percent in 2022. Crippled by Covid, China’s retail market grew only 1.6 percent last year to $4.07 trillion. With of 7.3 percent CAGR, the retail market is expected to reach 5.8 trillion by 2025, with mass merchants and e-commerce among the fastest-growing retail channels.

“Chinese demand for local, healthy, and natural products is increasing, and consumer spending has prioritized fashion items, sportswear, premium cosmetics, and consumer electronics,” Kearney said.

New stores and new formats are transforming Chinese retailing. B&M Stores is converting from distribution hubs into experiential centers, while Shanghai’s Xintiandi Plaza Shopping Center uses music festivals and social activities to create unique shopping experiences. Nike’s new Shanghai concept store—The House of Innovation—has an LED floor and a three-story wall that employees can dynamically update.

Where China excels is in social commerce and live streaming, which has exploded due to mobile connectivity and the rapid growth of influencers, also known as key opinion leaders. Its social commerce market grew by 44.1 percent in 2020, and is expected to grow by another 35.5 percent in 2021, reaching $363.26 billion. In addition, community group buying is a phenomenon that grew during the pandemic, fueled by residents living in gated communities forming WeChat groups to buy food and essentials. And now that e-commerce is reaching China’s lower-tier cities and rural areas, traditional retail continue to decline. As consumer demand for omnichannel experiences grows, retailers are responding with QR code scanning, self-checkout and speedy home delivery services. E-commerce is growing at a 15.2 percent CAGR, reaching $1.2 trillion last year and projected to reach $2.4 trillion by 2025. Foreign brands often rely on Chinese e-commerce platforms; Prada and Ikea opened flagship stores on Tmall and Marc Jacobs debuted a digital flagship on Tmall’s Luxury Pavilion.


Egypt is one of the few emerging markets that has maintained three years of positive GDP growth. Analysts believe the economy will grow at a 5 percent rate in the fiscal year ending June 2022 and another 5.5 percent the following year. Through macroeconomic and structural reforms, Egypt’s economy is beginning to stabilize.

Egypt’s retail market reached an estimated $200 billion in 2020, and is projected to grow at a CAGR of 5 percent from 2020 to 2025, reaching $254 billion. The pandemic has mostly helped grocery retailers as consumers stocked up and stayed home. About 90 percent of consumers are comfortable using digital payments for in-store and on-delivery transactions, contributing to the growth of e-commerce marketplaces such as and Jumia. Both are considered Egypt’s e-commerce leaders, accounting for over half of the digital marketplace.

An emerging middle class, growing population and rising secondary cities are fueling sales in shopping malls, convenience stores and online retail platforms.


Rising income levels—supported by rich natural resources such as gold, diamonds, manganese, and oil—are expected to fuel household spending with an annualized growth rate of 13.3 percent between 2021 and 2025. The retail sector is seen benefitting from an economic recovery, rising disposable income and a broadening middle class.

The Kearney report noted that after decades of being under penetrated and under served, Ghana is emerging as West Africa’s up-and-coming retail destination. In fact, the majority of lifestyle retailers are concentrated in the capital’s large shopping malls.

Currently, aspirational spending on big brands is restricted to Ghana’s upper class, while the bulk of the spending—and the majority of retailers—remain concentrated in the discount and value segments. The country’s emerging urban middle class provides opportunities for mass marketers. In fact, 57 percent of Ghana’s total population is living in large towns or cities, making its urbanization rate well above that of most SSA countries. In addition, rising Internet growth and mobile adoption are fueling the growth of Ghana’s digital economy. Right now, it has the highest mobile penetration in West Africa, or 55 percent by the end of 2019 versus the West African average of 44 percent. In addition, the country in 2020 became the first African country to launch a universal QR code enabling instant merchant payments from mobile wallets, bank accounts and cards, although cash is still a dominant method for payments.


India is the world’s third-largest retail market and fastest-growing economy, and its economic growth is expected to reach 9.5 percent in fiscal year 2021-2022 and 8.5 percent in fiscal year 2022-2023—despite slowdowns in consumer spending, low manufacturing output and global instability.

The country’s retail growth is driven by high disposable incomes, urbanization, middle class lifestyle changes and increased digital connectivity. The retail sector is expected to grow to $1.4 trillion by 2026, and more than $1.8 trillion by 2030. India’s e-commerce market is valued at $41 billion, and expected to grow 24 percent to 25 percent until 2025. “Value e-commerce is emerging as the biggest growth opportunity within lifestyle retail with 10x growth in 10 years,” the Kearney report said, adding that retail growth outside traditional metro areas is exploding. While sales in Tier 1 cities have declined to 8 percent, Tiers 2, 3 and 4 cities have seen growth rise to 10 percent. Digital convergence and blended formats have caused a shift in consumer behavior and expectations, while retailers will need to develop a digitally enabled commercial ecosystem.

Meanwhile, technology that enables omnichannel solutions is enjoying rapid adoption by both retailers and consumers. ABFRL, India’s top fashion retailer operating in partnership with Flipkar, is strengthening its omnichannel sales. Retailer Shoppers Stop, a leading department store, is embracing new technologies and posted 188 percent growth in fourth quarter omnichannel sales.  Moreover, brick-and-mortar retailers are partnering with online marketplaces, such as Amazon and Flipkart. And once considered nice-to-have features such as augmented reality and virtual dressing rooms have now become need-to-have tools to cater to digitally savvy consumers, according to the Kearney report.

The consulting firm noted the considerable consolidation in India’s retail industry, such as Walmart acquiring a 77 percent stake in Flipkart for $16 billion in 2018 and Reliance’s acquisition of Future Group’s retail, wholesale, logistical and warehousing businesses. But in general, brick-and-mortar sales continue to expand while e-commerce thrives. And international brands are moving into India, with luxury brands Philipp Plein and Billionaire opening stores in Mumbai and Delhi. Chinese e-commerce app Shein plans to re-enter the market with Amazon, while American denim brand Guess will open 50 stores in India over the next five years, with a base expansion in metro cities followed by doors in Tier 2 and Tier 3 cities.