Asia-Pacific Retail Business Vitality Index Report

strategy from business intelligence
Asia-Pacific Business Vitality Index

Major retail company
expansion in Asia-Pacific
01-Sep-06
Fusion Consulting © 2006. All rights reserved.

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©2006 all rights reserved. www.fusionc.com Asia-Pacific Retail Business Vitality Index | 1-Sep-06 0
Report content
Introduction _________________________________________________________________________________ 2
Main findings ________________________________________________________________________________ 8
Company profiles _______________________________________________________________________ 16
Appendix: Scores and data ________________________________________________________ 35
About Fusion Consulting ____________________________________________________________ 38
This Asia-Pacific Business Vitality Index report examines 18 foreign and Asian retailers and their expansion in the region.
The report is provided as is, free of charge and without any warranty or guarantee. Fusion Consulting accepts no
responsibility for errors or omissions, or for any loss or consequential loss arising as a result of decisions taken based on its
contents.
©2006 Fusion Consulting. All rights reserved. This report is copyright, however individual pages or portions thereof may be
copied referencing “Fusion Consulting” as the source.
Fusion Consulting is a business intelligence consultancy providing clear strategic advice on Asia-Pacific markets. With offices
in Hong Kong, Singapore and Shanghai, and 300 freelance consultants in 14 countries, we conduct custom research and
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For further information please see the About Fusion Consulting section, contact us on one of the phone numbers or email
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Introduction
Main findings
Company profiles
Appendix: Scores and data
About Fusion Consulting
Introduction
The Business Vitality Index measures companies’
Asia-Pacific regional expansion performance
Background to the Asia-Pacific Business Vitality Index
• The Asia-Pacific Business Vitality Index measures selected companies’ growth and
expansion within the Asia-Pacific region.
• It aims to provide an indication of a company’s presence in Asia as well as its
relative performance within its industry sector.
• The Index includes major companies that meet the following selection criteria:
• Global revenue >US$500 million.
• Present in at least one Asia-Pacific country (outside its home market if a
company of Asian origin).
• Present in Asia through own operations or manufacturing facilities, R&D
centres, distributors’ offices, joint-ventures, franchises and/or licensees.
Introduction
The Index is based on four key parameters
Asia-Pacific Business Vitality Index analysis parameters and weighting
Weighting
Revenue growth in Asia-Pacific 30%
Asia-Pacific share of global revenue 30%
Physical presence in Asia-Pacific 24%
Innovation initiatives in Asia-Pacific 16%
Total 100%
Introduction
Various performance indicators contribute to
the four main parameters
Details of analysis parameters and scoring
Companies are measured on four key parameters:

• Revenue growth in Asia-Pacific over the previous three years.
• Asia-Pacific share of global revenue.[1]
• Physical presence in Asia-Pacific, comprising:
• No. of countries in which the company is present.
• No. of operating centres.
• No. of wholly-owned operations vs. partner (eg. franchise or distributor) operations.
• Innovation initiatives in Asia-Pacific, comprising:

• No. of R&D centres in the region.
• Our analyst’s assessment of the company’s efforts in innovation and customisation for Asian markets.
• Performance ratings for each parameter are converted to a score of 1 to 5 and

then weighted using the weights shown on the previous page.
Note: [1] Asia-Pacific share of global revenue for companies with the majority of their revenue generated from within the
region is discounted to establish a more comparable rating.
Introduction
Fusion’s Business Vitality Index is unique as it
looks beyond financial performance
How the Business Vitality Index is unique
• The Business Vitality Index highlights companies which Fusion Consulting considers to
have the ability to impact their industries in Asia Pacific.
• We will happily add other companies on request, free of charge, on provision of the
relevant public domain information.
• The Index gives a broad and comprehensive picture of a company’s expansion in Asia
as it measures parameters beyond simple financials such as revenue and profit.
• It combines quantitative measures such as the number of operating centres with
qualitative measures of commitment to the region such as the degree of customisation
for Asian markets.
• The Business Vitality Index aims to benchmark selected companies within and
between different industry sectors including:
• Chemical.
• Consumer & retail.
• Financial services.
• Information & communication technology.
• Industrial & logistics.
• Life science.
• Media & leisure.
Introduction
18 retailers from a range of categories are profiled
in this Retail Business Vitality Index
Retail sector: 18 selected retailing companies
Company Category Country of origin Global revenue (US$m)
Wal-mart Hypermarket United States 285,200

Carrefour Hypermarket France 106,000
Tesco Hypermarket United States 57,900
7-eleven C-store United States 41,000
Auchan Hypermarket France 40,982
GAP Clothing United States 16,267
IKEA Specialty Sweden 15,400
B&Q Specialty United Kingdom 14,709
Toys R Us Specialty United States 11,100
Watsons Drugstore Hong Kong 8,125
E-mart Supermarket Korea 6,253
Isetan Department store Japan 5,819
FamilyMart C-store Japan 2,408
Ministop C-store Japan 950
Guardian Drugstore Hong Kong 643
Matahari Department store Indonesia 592
Giordano Clothing Hong Kong 514
Beijing Hualian Hypermarket China 468 [1]
Note: [1] Excludes revenues from Seiyu, which Hualian acquired in 2005.
Introduction
Main findings
Company profiles
Main findings
British hypermarket Tesco is the overall leader in
our Asia-Pacific Retail Business Vitality Index
Main findings of the retail business vitality analysis
• British hypermarket Tesco is the overall leader in our Retail Business Vitality Index, thanks to its
geographical presence, revenue performance and steady innovation in the region; America’s Wal-
mart is a close second; among Asian retailers, drugstore Watsons leads the pack.
• In the hypermarket segment, Tesco leads but Wal-mart will be a strong challenger when it expands
beyond China, and Beijing Hualian is growing fast since going international.
• In the drugstore category, Watsons and Guardian are competing head to head, expanding quickly
and aggressively within Asia-Pacific, with Watsons taking the lead at present.
• Among specialty retailers, B&Q is taking China by storm in home improvement; IKEA also
performs well, successfully combining its strength in cost leadership with careful product adaptation
and good service; Toys R Us on the other hand appears to be struggling with the increasing
competition, losing market share to hypermarkets.
• Department store Isetan has a lead over Matahari given its stronger revenue growth in the region.
• In clothing, Giordano is ahead of GAP in terms of presence and will continue to maintain its strong
foothold in Asia-Pacific with good quality products and services; GAP is only now beginning to expand
to more Asian markets (Singapore, Malaysia, China) as it attempts to seek new growth channels
following problems at home and sluggish sales in Japan.
• For c-stores, FamilyMart shows a relatively stronger revenue growth than 7-eleven and Ministop but
Ministop leads in terms of innovation thanks to its creative combo store concept (combining a
convenience store with a dine-in corner for in-store prepared food products).
• Overall, China is a key market for growth for retailing across categories, given the market size and
increasing consumer wealth; India is becoming another priority target as the sector opens up.
Main findings
Tesco, Wal-mart and B&Q are most vigorous,
while GAP, Toys R Us and Matahari lack drive
Retail business vitality mapping
Bubble size = Presence in Asia-Pacific[3] Highlights

IKEA
Stronger
Figures = Index score Wal-mart

198 Wal-mart is the overall leader,
Carrefour 243 with a winning combination of
Lively Vigorous strong geographical presence,
revenue performance and steady
161 176 205 Tesco
Watsons innovation for Asian markets.
244
INNOVATION[2]
135 B&Q shows the strongest revenue

Giordano Ministop 227 performance in Asia-Pacific for
Guardian 179 200 B&Q 2001-2004, followed by Wal-
Auchan
98 mart and Tesco.
Beijing Hualian
Matahari Isetan 178 IKEA is ahead of others in
90
innovation given its efforts in
Lacklustre Alert customisation for local markets.
7-eleven On presence, Giordano leads,
Weaker
Toys R Us 78 94 149 170

156 E-mart largely driven by its operation in
the most number of countries.
GAP
FamilyMart
GAP, Matahari and Toys R Us
Weaker REVENUE PERFORMANCE[1] Stronger
lag behind with relatively weaker
performance in revenue and
Vitality dimensions
innovation.
1. Revenue performance (X axis) 2. Innovation in AP (Y axis) 3. Presence in AP (bubble size)
- AP share of global revenue - Innovation initiatives in AP - No. of countries present in AP
- AP revenue growth (2001-04) - Customisation for local markets - No. of operations in AP
- No. of wholly owned vs. franchise/JV
Main findings
Tesco emerges as overall leader, followed very
closely by Wal-mart and then B&Q
Retail business vitality ranking
Company Category Country of origin Vitality score

weighted
Tesco Hypermarket UK 244
Wal-mart Hypermarket US 243
B&Q Specialty UK 227
Watsons Drugstore Hong Kong 205
Beijing Hualian Hypermarket China 200
IKEA Specialty Sweden 197
Isetan Department store Japan 181
Guardian Drugstore Hong Kong 179
Carrefour Hypermarket France 176
FamilyMart C-store Japan 170
Giordano Clothing Hong Kong 161
E-mart Supermarket Korea 156
7-eleven C-store Japan 149
Auchan Hypermarket France 98
GAP Clothing US 94
Toys R Us Specialty US 78
Main findings
Three out of the top five ‘most expansive’
players in Asia are from outside the region
Retail business vitality ranking by company origin
Company Category Country of origin Vitality score
FOREIGN (weighted)
Tesco Hypermarket UK 244
Wal-mart Hypermarket US 243
B&Q Specialty UK 227
IKEA Specialty Sweden 198
Carrefour Hypermarket France 176
Auchan Hypermarket France 98
GAP Clothing US 94
Toys R Us Specialty US 78
ASIAN
Watsons Drugstore Hong Kong 206
Beijing Hualian Hypermarket China 200
Isetan Department store Japan 180
Guardian Drugstore Hong Kong
170
FamilyMart C-store Japan
161
Giordano Clothing Hong Kong
156
E-mart Supermarket Korea
7-eleven C-store Japan 149
Main findings
Asian retailers are catching up with foreign
brands, proving that they too can be innovative
Retail innovation ranking
Among the top ten most
Category Overall Innovation Asian innovative retailers, five are Asian
Company
companies.
(weighted) (weighted)
Watsons has in recent years put
IKEA Hypermarket 198 80 in great efforts to revitalise its
Wal-mart Hypermarket 243 76 image and remain competitive by
Watsons Drugstore 205 62 A providing a new shopping
Hypermarket 176 62 environment and more creative,
Carrefour
customised services; it regularly
Giordano Clothing 161 53 A implements marketing and
Tesco Hypermarket 242 53 promotional activities to attract
Ministop C-store 135 49 A more customers.
B&Q Specialty 227 40 Giordano shows strong
Beijing Hualian Hypermarket 200 40 A commitment to providing
Guardian Drugstore 179 36 A innovative products including for
example wrinkle-free trousers and
Auchan Hypermarket 98 31 ‘dry’ polo shirts; Giordano is also
Matahari Department store 95 4 A one of the first Asian retailers to
Isetan Department store 156 4 A embrace the total service quality
FamilyMart C-store 170 4 A culture.
E-mart C-store 156 4 A Japanese c-store Mini-stop is
7-eleven C-store 149 4 A showing promising potential as it
continues to focus on offering new
GAP Clothing 94 4
products on a regular basis.
Toys R Us Specialty 78 4
Main findings
Smaller players such as B&Q and Beijing Hualian
are experiencing significant revenue growth
Retail revenue growth compared
Bubble size = Smaller retailers (in terms of

Giordano Asia-Pacific revenue
regional revenue and presence)
Stronger
are growing fast in terms of sales.

Watsons B&Q may be relatively small in
terms of revenue and presence in
Asia-Pacific, it has shown
Carrefour 7-eleven
particularly strong revenue growth
PRESENCE IN ASIA
in the region (for 2001-2004).

FamilyMart Tesco
Toys R Us Chinese hypermarket Beijing
Hualian is also experiencing very
Ministop Guardian
Isetan strong revenue growth despite its
smaller operational presence in
IKEA B&Q the region.
Beijing Hualian
Matahari While Giordano has an extensive
Asian presence, it recorded
GAP
significantly lower growth in
Weaker
E-mart
Wal-mart
Auchan revenue for the region compared
to the other retailers.
Weaker REVENUE GROWTH Stronger
Comparison dimensions
1. Revenue growth (X) 2. Presence in Asia (Y) 3. AP revenue (bubble size)
- AP revenue growth (2001-04) - No. of countries present in AP
- No. of operations in AP
- No. of wholly owned vs. franchise/JV
Main findings
Foreign players are stepping up expansion in
China, hoping to capture market share
Retail expansion in China
Company Vitality score Stores in China Expansion plans for China
Wal-mart 243 60 18 stores in 2006

Tesco 242 39 12 stores by 2007
B&Q 227 48 100 stores by 2010
IKEA 197 3 10 stores in the next 6 years
Carrefour 176 79 20 stores in 2006
Auchan 98 13 n/a
China is considered a key area for growth for retailers; many companies are stepping up their
expansion plans, hoping to get a bigger share of the growing consumer retail business.
Home furnishing store B&Q is perhaps the boldest of all, aiming to have 100 more stores by 2010.
IKEA has announced it will open another 10 stores in China in the next six years.
Food retailers are just as aggressive; Carrefour, currently the biggest foreign food retailer in China
with 79 stores in 32 cities, is scheduled to open another 20 more in 2006.
Wal-mart is hoping to catch up with at least 18 new stores in China in 2006; in May 2006, Wal-mart
decided to withdraw from South Korea to focus resources on the more profitable Chinese market.
While foreign players continue to push for more growth in China, local competition and local
customisation of products and services will remain key challenges.
Introduction
Main findings
Company profiles
Company profiles
Tesco is building on its success, currently
targeting China and India
Tesco performance scores
Scores on four key parameters (weighted) Best in Actual

Class data
AP revenue
133.3 150 46%
growth
Innovation in
53.3 80 60%
AP
Presence in AP 44.0 78 See [1] Operation locations

Wholly owned
Franchised/ JV
AP share of 18 9%
13.5
global revenue Best in Class
Vitality score
244
[1] Presence in AP (calculated from indicators below, weighted)
244 Maximum possible
660
No. of countries
17.1
present 34 7 Tesco shows very strong revenue growth in Asia and a
substantial AP share of global revenue (especially
No. of operating
11.1 among non-Asian retailers).
centers 20 291
Plans to open its first store in Beijing are already in
Countries with
the pipeline for 2007 when China fully liberalises its
own office
14.3 23 5 retail market according to its commitments to the
WTO; Tesco is also planning to move into India.
Countries with
distributor office 1.4 13 1
The British retailer is certainly looking to build on its
success in the region so far, and establish a stronger
foothold in the region through focused investments.
Company profiles
Wal-mart has a strong presence in China and
impressive revenue growth
Wal-mart performance scores

Class data
AP revenue
141.7 150 54%
growth
Innovation in AP 75.6 80 90%

Wholly owned
Franchised/JV
AP share of 18 4%
6.0
Vitality score
244
660
No. of countries 3
8.6 34
present Wal-mart has expanded its operations aggressively in
China since its first entry in 1996; China will remain
No. of operating
5.6 20 61 one of its key markets for expansion and plans to
centers move into India are in the pipeline.
Countries with Wal-mart takes pride in providing innovative services
own office
2.9 23 1 to its customers; it opened its first Vision Centre in
Wuhan, China, becoming the first mass retailer to
Countries with offer vision services.
* Revenue growth in Asia is estimated using growth in number of stores in the
region for 2001-2004.
Company profiles
B&Q’s rapid growth in the region driven by
Chinese acquisition
B&Q performance scores
Scores on four key parameters (weighted) Actual

Best in
data
Class
AP revenue 150 150 58%

growth
78 See [1] Operation locations

Presence in AP 23.5
Wholly owned
Franchised/JV
AP share of 18 3%
4.5
Vitality score
244
660
No. of countries 34 3
present
8.6 B&Q has enjoyed tremendous growth in revenue in
the region, largely driven by sales in China given the
No. of operating liberalisation in home ownership in China.
7.8 20 63
centers
In 2005, B&Q acquired OBI’s operations (13 stores) in
China, increasing its presence and market share in the
Countries with
own office
5.7 23 2 country.
Countries with
Besides China, Taiwan and Korea have been selected
as key areas for growth.
The UK chain is likely to continue to do well with its
established branding and operation scale.
Company profiles
Watsons is well established across Asia-Pacific
as a top personal care store
Watsons performance scores

Class data
AP revenue
66.7 150 8.8%
growth
Innovation in
62.2 80 80%
AP

Presence in AP 61.6
Wholly owned
Franchised/JV
AP share of 18 100%
15.0
Vitality score
244
660
No. of countries 9
present
25.7 34 Watsons has been expanding rapidly across the region
since its first launch in Hong Kong; it is now present in
No. of operating eight key markets in the region.
centers
14.4 20 715
Recently, Watsons stores underwent a major make-
Countries with
over to introduce a more modern look as well as to
own office
20.0
23 7 provide more personalised in-store services.
* Revenue growth in Asia is estimated using growth in number of stores in the region
Countries with
for 2000-2004.
Company profiles
Beijing Hualian has potential to challenge the
bigger foreign players in retailing
Beijing Hualian performance scores

Class data
AP revenue
125.0 150 26%
growth
Innovation in
40.0 80 50%
AP

Wholly owned
Franchised/JV
AP share of 18 100%
15.0
Vitality score
244
660
present
5.7 Beijing Hualian’s key strengths are its relatively strong
revenue growth and its innovation initiatives; the
No. of operating company is the first to set up an Innovation Centre for
8.9 20 70
centers information management and technological research.
Beijing Hualian has recently acquired Seiyu Singapore,
Countries with marking its first move outside China; Seiyu has four
own office
5.7 23 2
department stores in Singapore.
Countries with
13 0
Beijing Hualian is the first Chinese retailing company
distributor office 0.0
in its category to expand outside of China.
* AP share of global revenue estimated using AP share of total number of stores.
Company profiles
IKEA stays ahead on innovation, consistently
customising its products to local needs
IKEA performance scores

Class data
AP revenue
83.3 150 12%
growth

Wholly owned
Franchised
AP share of 18 3%
4.5
Vitality score
244
660
No. of countries 6
17.1 34 The Swedish company maintains its standardised
present
product ranges for Asia but does especially well in
No. of operating innovating and customising its product lines to adapt
1.1 20 15
centers to local market needs.
In China, IKEA started a balcony section because
Countries with
own office
5.7 23 2 many Chinese homes have balconies; store layout is
also designed to reflect local home conditions.
Countries with
In Hong Kong, IKEA sells Hong Kong sized beds, which
are shorter than standard sized beds.
Company profiles
Isetan is looking to China for growth
Isetan performance scores

Class data
AP revenue
100.0 150 16%
growth
Innovation in
4.4 80 20%
AP

Wholly owned
Franchised/JV
AP share of 18 100%
15.0
Vitality score
244
660
No. of countries
17.1 34 6
present Isetan has seen positive revenue growth in recent
years; it will continue to expand its presence in Asia,
No. of operating
3.3 hoping to capture demand from the growing number
centers 20 23
of affluent consumers in the region.
Countries with
The upscale department store is especially looking to
own office
14.3 23 5 China for growth.
Countries with
distributor office 1.4 13 1 * Revenue growth in Asia is based on 2003-2004 sales figures.
Company profiles
Guardian aims to expand and strengthen its
position in the drugstore category
Guardian performance scores

Class data
AP revenue
91.7 150 15%
growth
Innovation in
40.0 80 50%
AP

Wholly owned
Franchised/JV
AP share of 18 100%
15.0
Vitality score
244
660
No. of countries
8.6 34 3
present Guardian, although only present in three countries,
shows promising revenue growth in the region.
No. of operating
16.7 20 366 Backed by major retail group Dairy Farm (which owns
centers
a chain of supermarkets, hypermarkets and
convenience stores), Guardian aims to strengthen its
Countries with
5.7 23 2 position as one of Asia’s leading one-stop shop for
own office
healthcare needs.
Countries with
Company profiles
Carrefour has become a household name in
many key Asian markets
Carrefour performance scores

Class data
AP revenue
50.0 150 7%
growth
Innovation in
62.2 80 80%
AP

Wholly owned
Franchised/JV
AP share of 18 7%
10.5
Vitality score
244
660
No. of countries
22.9 34 8
present Carrefour is relatively strong in terms of its presence
in Asia but falls behind top competitors Tesco and
No. of operating
7.8
Wal-mart in revenue performance in the region.
centers 20 170
In terms of customisation, Carrefour adapts well to
local markets, for example offering vegetables
Countries with
own office
22.9 23 8 trimmed in the local styles.
Carrefour also invests in researching local cultures and
Countries with
13 0
habits before launching a new store.
Company profiles
FamilyMart expands in the region
FamilyMart performance scores

Class data
AP revenue
108.3 150 17%
growth
Innovation in
4.4
AP 80 20%

Wholly owned
AP share of Franchised/JV
15.0 18 100%
global revenue
Best in Class
Vitality score
244
660
No. of countries
14.3 34 5
present
FamilyMart is one of the top convenience store chains
in Japan and is now determined to replicate its success
No. of operating
centers
18.9 20 11,501 overseas.
Outside Asia, FamilyMart is also going to the US.
Countries with
own office
2.9 23 1 FamilyMart emphasises not only high quality, fresh,
ready-to-eat products at its stores but also high quality
Countries with hospitality to set itself apart from its competitors.
Company profiles
Giordano is everywhere and continues to offer
high quality products and services
Giordano performance scores

Class data
AP revenue
8.3 150 1%
growth
Innovation in
62.2 80 80%
AP

Wholly owned
Franchised/JV
AP share of 18 80%
12.0
Vitality score
244
660
No. of countries
present 34 34 12 Giordano has the most extensive network of stores
spread across the most number of countries.
No. of operating
centers
15.6 20 1,401 Revenue growth has been very slow over recent
years; nonetheless, the famous clothing retailer
Countries with continues to emphasise not only product quality but
22.9 also service quality, with famously courteous and
own office 23 8
friendly staff in the stores.
Countries with
distributor office 5.7 Giordano also pays special attention to local
13 4
preferences, customising designs to suit local taste,
eg. subtle colours for its Hong Kong customers but
bright colours for the Chinese market.
Company profiles
E-mart is focused on Asia but remains cautious
with its expansion plans
E-mart performance scores

Class data
AP revenue
116.7 150 19%
growth
Innovation in
4.4 80 20%
AP

Wholly owned
Franchised/JV
AP share of 18 100%
15.0
Vitality score
244
660
No. of countries
5.7 34 2
present E-mart has been slow and cautious in its expansion in
Asia; it opened its first store outside of South Korea in
No. of operating
10.0 20 74 China in 1997 and another three more only in 2005.
centers
In spite of its less aggressive expansion strategy, E-
Countries with mart has achieved strong revenue growth and success
2.9 23 1 in South Korea.
own office
Countries with
The retailer’s expansion is focused only on the China
distributor office 1.4 13 1 market for now; if its China operations take off, it will
move into southeast Asia next.
Company profiles
While still strong in presence, 7-eleven needs
innovation to generate new interest
7-eleven performance scores

Class data
AP revenue
75.0 150 11%
growth
Innovation in
4.4 80 20%
AP

Wholly owned
Franchised/JV
AP share of 18 76%
11.4
Vitality score
244
660
No. of countries
25.7 34 9
present 7-eleven is strong in terms of presence with more
than 21,000 stores in its franchise network across nine
No. of operating
20.0
countries.
centers 20 21,328
The c-store chain is now wholly owned by 7-eleven
Japan.
Countries with
0.0 23 0
own office While still thriving and growing, what the c-store lacks
is a little bit more innovation and a revamp to refresh
Countries with
13 9
its brand.
* Revenue growth in Asia is estimated using growth in number of stores in the region
for 2000-2004.
Company profiles
Ministop is looking to China as a base for its
future growth in Asia-Pacific
Ministop performance scores

Class data
AP revenue
33.3 150 4%
growth
Innovation in
53.3
AP 80 70%

Wholly owned
AP share of Franchised/JV
global revenue
15.0 18 100%
Best in Class
Vitality score
244
660
8.6
present Ministop prides itself with its modern combo store
concept – a convenience store which provides in-store
No. of operating
17.8 20 2,681 prepared food products, which can be eaten at a dine-
centers in corner equipped with clean and comfortable
seating.
Countries with
own office
5.7 23 2 Ministop is part of AEON, which is Japan’s largest retail
group in terms of sales.
Countries with
distributor office 1.4 13 1 This c-store will remain customer-oriented and is
determined to provide value add services.
Company profiles
Auchan is paying more attention to Asia, driven
by rise in Chinese wealth
Auchan performance scores

Class data
AP revenue
41.7 150 6%
growth
Innovation in
35.6 80 40%
AP

Wholly owned
Franchised/JV
AP share of 18 4%
6.2
Vitality score
244
98 Maximum possible
No. of countries 660

5.7
present 34 2
Auchan has followed a similar path of its key European
No. of operating
rivals in expanding to Asia.
4.4
centers 20 40 However, the speed and scope of its spread in Asia is
not quite on par with its competitors.
Countries with
own office
2.9
23 1
Auchan claims to remain committed to growing its
business in Asia, especially China, but it remains to be
seen what aggressive expansion strategies it will
Countries with
distributor office
1.4 13 1 implement.
Company profiles
GAP’s expansion in Asia-Pacific has been slow
GAP performance scores

Class data
AP revenue
58.3 150 97%
growth
Innovation in
4.4 80 20%
AP

Presence in AP 19.0
Wholly owned
Franchised/JV
AP share of 18 8%
12.3 Best in Class
global revenue Vitality score
244
94 Maximum possible
660
No. of countries
2.9 34 1
present
GAP is only present in Japan currently and the
Japanese market has suffered sluggish sales in recent
No. of operating years.
13.3 20 78
centers
Nonetheless, GAP continues to show an interest in
Countries with Asia and it hopes to find new channels for growth.
2.9 23 1
own office The US clothing retailer has recently signed a
Countries with franchise agreement to open GAP stores in Singapore
distributor office 0.0 13 0 and Malaysia from 2006.
Company profiles
Matahari is starting to venture outside of its
home market
Matahari performance scores

Class data
AP revenue
25.0 150 2%
growth
Innovation in
31.1 80 30%
AP

Wholly owned
Franchised/JV
AP share of 18 100%
15.0
Vitality score
244
90 Maximum possible
660
No. of countries
5.7 34 2
present Matahari is the pioneer of department stores in
Indonesia; regionally however, it so far lacks the
No. of operating bearing it enjoys in its home market.
12.2 20 125
centers
Not unlike other retailers, Matahari is going to China;
it recently opened its first store outside its home
Countries with
own office
5.7 23 2 market in Shenzhen in 2005.
Further expansion plans for China are in the pipeline
Countries with
13 0
but Matahari will go slowly and steadily to make sure it
gets the basics right.
Company profiles
Toys R Us is losing steam as it faces increasing
competition
Toys R Us performance scores

Class data
AP revenue
16.7 150 1%
growth

Wholly owned
Franchised/JV
AP share of 18 12%
17.7
Vitality score
244
78 Maximum possible
660
No. of countries 34 8 Toys R Us is losing market share in some markets
22.9
present
where customers are going to competitors such as
Wal-mart for cheaper toys.
No. of operating
3.3 20 38
centers Japan is its biggest market in Asia, constituting 70% of
its Asian operation, but sales grew a mere 1.3% from
Countries with
2.9 23 1 2001 to 2004.
own office
In the face of increasing competition, the company’s
Countries with direction has been unclear, especially in terms of
branding and marketing.
* Revenue growth in Asia is based on Japan’s sales figures.
Introduction
Main findings
Company profiles
Appendix
Ranking scores (weighted)
Overall Countries No. of Countries with Countries with AP share of AP revenue Innovation
Index present operating wholly-owned franchise/JVs global revenue growth
score centres centres
Weight --> 8 4 8 4 30 30 16
Tesco 244 17 11 14 1 14 133 53

Wal-mart 243 9 6 3 3 6 142 76
B&Q 227 9 8 6 1 5 150 49
Watsons 205 26 14 20 1 15 67 62
Beijing Hualian 200 6 9 6 0 15 125 40
IKEA 198 17 1 6 6 5 83 80
Guardian 179 9 17 6 1 15 92 40
Carrefour 176 23 8 23 0 11 50 62
FamilyMart 170 14 19 3 6 15 108 4
Giordano 161 34 16 23 6 12 8 62
E-mart 156 6 10 3 1 15 117 4
Isetan 156 17 3 14 1 15 100 4
7-eleven 149 26 20 0 13 11 75 4
Ministop 135 9 18 6 1 15 33 53
Auchan 98 6 4 3 1 6 42 36
Matahari 95 6 12 6 0 15 25 31
GAP 94 3 13 3 0 12 58 4
Toys R Us 78 23 3 3 10 18 17 4
Appendix
Actual performance data
Overall Countries No. of Countries with Countries with AP share of AP revenue Innovation
Index present operating wholly-owned franchise/JVs global revenue growth
score centres centres
Tesco 244 6 291 5 1 9% 46% 70%

Wal-mart 243 3 61 1 2 4% 54% 90%
B&Q 227 3 63 2 1 3% 58% 60%
Watsons 205 9 715 7 1 100% 9% 80%
Beijing Hualian 200 2 70 2 0 100% 26% 50%
IKEA 198 6 15 2 4 3% 12% 100%
Guardian 179 3 366 2 1 100% 15% 50%
Carrefour 176 8 170 8 0 7% 7% 80%
FamilyMart 170 5 11,501 1 4 100% 17% 20%
Giordano 161 12 1,401 8 4 80% 1% 80%
E-mart 156 2 74 1 1 100% 19% 20%
Isetan 156 6 23 5 1 100% 16% 20%
7-eleven 149 9 21,328 0 9 76% 11% 20%
Ministop 135 3 2,681 2 1 100% 4% 70%
Auchan 98 2 40 1 1 4% 6% 40%
Matahari 95 2 125 2 0 100% 2% 30%
GAP 94 1 78 1 0 8% 9% 20%
Toys R Us 78 8 38 1 7 12% 1% 20%
Introduction
Main findings
Company profiles
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Asia-Pacific Business Vitality Index analysis parameters and weighting

Revenue growth in Asia-Pacific 30%

Asia-Pacific share of global revenue 30%

Physical presence in Asia-Pacific 24%

Innovation initiatives in Asia-Pacific 16%

Companies are measured on four key parameters:

• Innovation initiatives in Asia-Pacific, comprising:

• Performance ratings for each parameter are converted to a score of 1 to 5 and

Wal-mart Hypermarket United States 285,200

Bubble size = Presence in Asia-Pacific[3] Highlights

Figures = Index score Wal-mart

135 B&Q shows the strongest revenue

Toys R Us 78 94 149 170

Company Category Country of origin Vitality score

Bubble size = Smaller retailers (in terms of

are growing fast in terms of sales.

in the region (for 2001-2004).

Company Vitality score Stores in China Expansion plans for China

Wal-mart 243 60 18 stores in 2006

Scores on four key parameters (weighted) Best in Actual

Presence in AP 44.0 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Innovation in AP 75.6 80 90%

Presence in AP 19.8 78 See [1] Operation locations

Scores on four key parameters (weighted) Actual

AP revenue 150 150 58%

Innovation in AP 48.9 80 60%

78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 20.3 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Innovation in AP 80.0 80 100%

Presence in AP 29.7 78 See [1] Operation locations

Isetan performance scores

Scores on four key parameters (weighted) Best in Actual

Presence in AP 36.2 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 32.4 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 53.5 78 See [1] Operation locations

FamilyMart performance scores

Scores on four key parameters (weighted) Best in Actual

Presence in AP 41.7 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 78.4 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 20.0 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 58.6 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 33.5 78 See [1] Operation locations

Scores on four key parameters (weighted) Best in Actual

Presence in AP 14.4 78 See [1] Operation locations

No. of countries 660

GAP performance scores

Scores on four key parameters (weighted) Best in Actual

78 See [1] Operation locations