Since 1984, IFC has prioritized support for the retail sector in developing countries around the world because the sector is a lynchpin for growing economies – a strong source of job creation and tax revenue, and a path to better health and quality of life as access to consumer goods expands. Much of our investment has focused on three high-impact sub-sectors: grocery stores, shopping centers, and general merchandise retailers.Retailers today face many challenges: keeping costs low and supply chain efficiencies high; protecting their brand and reputation; responding rapidly to changing consumer tastes; expanding their reach to penetrate new markets and compete from a position of strength; and greening their operations. In emerging markets, these are more difficult challenges to tackle, and a company’s costs can soar. IFC’s unique blend of financial products – including loans with long tenures – and advisory services provides added benefits to client companies, helping make investment into these markets a viable option.
Expertise Across Subsectors
IFC’s sectoral expertise, regional knowledge, and leadership in sustainability offer significant value to clients, in addition to the full suite of financial products we offer. our retail projects are in several broad subsectors: the full range of retailing, shopping malls, entertainment, and distribution (warehousing and logistics). IFC’s portfolio features 45 projects in 31 countries in Africa, Asia, Eastern Europe, Latin America and the Middle East.
Expandng Consumer Options
Within the retail sector, IFC has financed supermarket and hypermarket chains, apparel distributors, specialty shops, coffee shops, do-it-yourself stores, and electronics stores. IFC is encouraging new and experienced players to invest in projects that blend profit potential with job creation and environmental stewardship – a combination that can benefit the company, local consumers, and the country as a whole.
Building Local Supply Chains
While IFC retail projects vary in type, size, and country, they share one core component: their role in cultivating local supply chains. For our clients, local supply chains mitigate foreign currency exchange risk and can greatly reduce the cost of goods, improving the bottom-line profit that is critical for a sector typified by slim margins. A competitive, reliable local supply chain can help maintain price points so that retailers can differentiate themselves as more players enter the market. The local economy as a whole benefits as well: the development of new, related industries such as agribusiness, food processing, light manufacturing, warehousing, and distribution creates jobs, contributes to the tax base, builds local banking capacity, improves infrastructure, and raises labor standards. In turn, these economic benefits create wealth and disposable income – resulting in more spending on retail goods.
