In 2025, the retail sector is transforming as industry giants consolidate power, discount-orientated retailers outperform the market amid economic uncertainty, and social media platforms are evolving into important retail players in their own right. Meanwhile, global sales growth is increasingly fuelled by emerging markets, especially in Asia Pacific, while China-affiliated e-commerce marketplace operators are capturing the attention and loyalty of consumers around the world.
This report comes in PPT.
Consolidation in the global retail sector continues to gather steam, as the largest, most well-capitalised players leverage their strengths to gobble up a greater share of consumer spending. This is placing intense pressure on smaller retailers, which are finding it hard to stand out in an increasingly top-heavy industry.
Due to the ongoing cost-of-living crisis, discount-orientated retail formats such as warehouse clubs, discounters, and variety stores are significantly outperforming store-based retail as a whole. Meanwhile, a new wave of online marketplaces offering rock-bottom prices are also finding success.
Social commerce is booming. In turn, social media companies are making their platforms more shoppable by adopting more retail-focused user interfaces and making greater use of shoppable videos. Some platforms are even transitioning into fully-fledged e-commerce marketplaces.
With retail sales declining across the West, emerging markets – particularly those in Asia Pacific – now account for almost all of global retail sales growth. Thriving middle classes in these markets, urbanisation, and the expansion of internet connectivity are driving retail’s shift eastward.
Previously focused on the Chinese market, e-commerce marketplaces that are either based in China or can trace their origins to the country are successfully expanding their operations abroad. In 2025, three marketplaces in particular – TikTok Shop, Temu, and Shein – are leading the charge.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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