New Retailing market report from Business Monitor International: "Colombia Retail Report Q1 2014"
Boston, MA -- (SBWIRE) -- 12/19/2013 -- As a result of the Colombian government's emphatic business-friendly approach, the Andean country has experienced a thriving economy in the last decade. Colombia is the third largest Latin American country in terms of population and its declining unemployment rates, rising incomes, and a rapidly expanding middle class give it tremendous economic potential that is perceived by domestic and international investors as highly desirable.
The Colombian government's long-term development programs may have started to pay off. Increasing GDP per capita and an ever-expanding middle class suggest that the economic gap and purchasing power disparities among the national population are shrinking. The Colombian population is projected to grow at an annual average rate of 1.2% over the next five years, while gross income per household is expected to grow at a remarkable average of 7.8% in the same period. The population is highly urbanized; rising cities such as Medellin and Cali with more than 2mn inhabitants, Barranquilla and Cartagena with approximately 1mn, as well as another seven cities populated by at least half a million people, are acting as catalysts for a dynamic and competitive retail sector that presents great potential benefit to investors looking for new ventures.
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The majority of Colombia's population is young, active and entrepreneurial. Many young people are following trends from the developed world, breaking cultural traditions and leaving home at an early age to study and work. This early mobility has led to the creation of new households that consume more than older generation households. The young people sector of the population represents the driving force behind the strong domestic demand and the national GDP, which reached US$367bn in 2012 - exceeding the Central Bank's expectations - and is forecast to rise to US$379bn in 2013.
Foreign retail companies have invested significant sums in the retail sector of the Andean country. Colombia ranks 18th in market popularity for expansion among international retailers. In the shopping centre arena, interest remains intact not only for the well-known aggressive Chilean investors, but also for other operators from across the region, attracted also by the fact that 66% of the country's purchases take place in shopping centres. According to the Colombian Shopping Centre Association (ACC), between now and 2015 more than 56 projects ranging from small galleries to large western-type malls will be executed.
These represent an approximate investment value of US$2.5mn.
Colombia's geographical position holds an advantage as well. It is surrounded by other thriving economies, such as Brazil and Peru, as well as the Caribbean Sea. Increased international tourism to Colombian beaches has spurred the luxury tourism sector, which constitutes growing potential in the retail sector.
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