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From Uganda to Congo, India to Vietnam, we will continue to see an almost identical retail experience. Almost all shops in the whole world will continue to be the roughly the size of a single shipping container – never much wider or deeper or higher. One outlet next to another for mile after mile. COVID has had no impact on this megatrend despite all the media hype.

Such shops, typically with brick walls and tin roofs, are often living rooms of families who own them, and bedrooms at night. Lit by a single light bulb, such stores have an almost identical range of products as ten or twenty other similar shops within a few hundred metres. We see clusters of clothes shops, clusters of metal working shops, clusters of furniture shops.

The most important rule in retail location has always been co-opetition. And this will be as true in the slums of a megacity as on the streets of Paris or New York. Jewellers will continue to cluster, fish sellers will cluster. Retail clustering will dominate physical retail globally for the next 100 years.

Malls will take off in all emerging markets

At the same time, expect growth in top-down mass-retailing in emerging markets, despite e-commerce.

Big companies will invade a completely new area where there has never been a single store a fraction of the size before. The first mall in a new area will usually be relatively informal, not air-conditioned, housing smaller shops. And then premium malls will follow, identical in many ways to malls in Europe, Singapore, Beijing and North America.

Boom in informal retailers

Alongside container-sized outlets, shopping malls and open markets, expect hundreds of millions of informal retailers for many local products such as water, soap, rice and flour – selling at traffic lights, on the pavement and from bicycles or small stalls. The key for every maker of lower-cost products in megacities will be these informal networks.

Manufacturers will divide more products up into tiny packages or bottles, to use for a single day or week, for those on very low incomes (bottom of the pyramid). Hundreds of millions of informal retailers on the street will be children in 2025 – street selling will often be their only means of survival. This will cause moral outrage in tourists from wealthy nations located many thousands of miles away, who think that all child labour should be banned.

Retail in Latin America heads online

Latin America is also experiencing an online revolution with more than $80bn of sales, including $26bn in Mexico, growing 40% a year, and $23bn in Brazil. In Mexico 58% of adults have online access compared to 46% in Brazil, 67% in Argentina, 59% in Chile and 34% in Peru.

Most consumers in the region are very uncomfortable about buying online, because they do not trust the payment system, but that will change fast. Most online sales are still on websites owned by traditional retailers but the big threat from pure online retailers is beginning to be felt.

Few people have credit cards or bank cash cards, so newer types of payment will take off. PayPal, for example, is already used for most online sales in Mexico. A hundred million people in Latin America are likely to move straight into a PayPal or mobile payment world, having never had a bank account or plastic card before.


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