Emerging Markets China, India and Russia Are Among the Growth Drivers
India — SAP AG (NYSE: SAP) announced today strong growth in the Retail industry in emerging economies, including Brazil, China, India, Russia and Ukraine, solidifying its current leading retail market position. Three of the fastest growing markets for SAP Retail are Russia (CIS), Ukraine and India. More than 15 high growth retail companies in Russia and the Ukraine launched or expanded SAP for Retail implementations last year, contributing to SAP CIS’ 95 percent year-over-year growth in retail license revenue in 2006. Worldwide, more than 850 retail and wholesale customers signed with SAP in the past 12 months, yielding a total of 4,100 customers, including Ace Hardware, Au Bon Pain, Beall’s, Chico’s, ESPRIT, Foodstuffs South Island, Free Record Shop, Kenneth Cole, Shane Co., Sport Chalet, Virgin Entertainment and Wumart. The announcement was made at the World Retail Congress, being held in Barcelona, Spain, March 28-30.
SAP’s Rapid Retail Growth in CIS
SAP added leading Russian and Ukrainian retailers Technosila, Mir and Monro, Odezhda 3000, M.Video, Euroset, Homecenter the Fozzy Group and Furshet supermarket network, to its growing customer roster. In addition, existing customers Kopeika and Eldorado significantly expanded their SAP for Retail implementations. Furthermore, SAP CIS already has existing relationships with large retailers, including Bananamama, Utkonos, Lenta, Ramstor, Ultrastart, Euroset and V-Lazer, in the CIS countries.
One of the largest SAP implementations in the past year in Russia was the launch of the project for the electronics retail giant Technosila. The Russian retailer of home appliances and electronics goods selected SAP to unite the activities of its different business lines into one single system nationwide. By creating a common management and control structure, SAP enabled Technosila to increase cost efficiencies and adapt to market changes.
“Due to the dynamic nature of the retail business all of our software solutions are required to provide a customer support system to help us adapt to business changes,” said Leonid Tyukavkin, vice president of Technosila, “SAP offers the market’s best network of retail consultants and partners and a localized solution with Russian language support.”
“Obtaining the flexibility to grow and adapt to market changes is a common objective for all of our retail customers in the emerging economies around the world,” said Darryl Owen, Vice President of Retail and Wholesale, EMEA NEWS, SAP. “It is widely recognized that many Western European retail markets are reaching saturation and that international expansion is one of the key strategies to maintaining and increasing retail sales growth. Therefore, having fully globalized technology in place to exploit new market opportunities and seamlessly integrate them into a global operations network is crucial for many of our retail clients.”
Capturing the Retail Boom in Asia
Emerging markets have become attractive growth areas for international and national retailers due to the increased purchasing power of the rising middle class and the pervasive nature of global brand recognition for retailers. In Asia-Pacific, SAP has a strong foothold with key customer wins in India and China.
In India, SAP for Retail enjoyed 70 percent year-over year growth rate in 2006, servicing key Indian retailers such as Pantaloon Retail, Monte Carlo, Cotton County Fashion, Barista Coffee, Provogue and Vishal Megamart. With over 1,400+ customers in India, SAP is the leading provider of business software solutions for Indian enterprises. In 2006, SAP won more than 498 new customers in India. SAP capitalized on the growing demand for enterprise software in the retail sector, with Indian Retailing Best Practices and a special focus on the grocery, hardline, and fashion industries.
SAP has created and is operating an SAP Retail Innovation Center in India to better serve both the Indian market and global markets with forward-thinking uses of retail technologies specifically focused on emerging market dynamics, best practices-based retail expansion and consumer intimacy programs.
SAP offers an Asian expansion program to mid-market retailers in the UK, EU and EFTA designed to help retailers with their expansion plans into and out of the emerging Asian markets by providing a synthesis of best retail practices between East and West. With 1.2 billion potential customers, China is on the top of the list for retailers that pursue growth opportunities in Asia-Pacific markets.
In China, SAP is servicing a growing number of Chinese retailers, including SaSA, Sichuan Xinhua Bookstore, Wumart Group and Suning Appliance Chain. One of the most recent wins is the Wumart Group, one of the largest and fastest-growing private supermarket chains in China. Wumart selected SAP™ ERP and SAP for Retail to upgrade the company’s information systems to drive profits and increase their market share of the rapidly maturing Chinese retail landscape.
Enabling Technology Innovation in Brazil
At the World Retail Congress in Barcelona, O Boticário one of the world’s largest perfumery and cosmetics franchising network from Brazil and a SAP customer, is one of the nominees for the show’s Best Use of Technology Awards. The Brazilian company has set an example on how companies from the emerging economies are utilizing innovative technologies to become a large player nationwide and on the global market place. O Boticário selected SAP in 2004 to implement SAP R/3 and has expanded its use of SAP software in the past years, including the “Sales and Marketing Integrated” solution based on CRM (Customer Relationship Management), BPS (Business Planning and Simulation), PLM (Product LifeCycle Management) and SCM (Supply Chain Management) functionalities to support its business growth.”
Recognizing the role of technology to implement business objectives, O Boticário was the recipient of the NRF International Retailer of the Year Award in 2006.
About SAP for Retail
SAP for Retail is a solution portfolio that helps retailers understand their business, anticipate the needs of their business and inspire their customers, employees and shareholders by delivering results. The portfolio comprises an end-to-end set of retail solutions; merchandise management and planning; store operations (through the acquisition and integration of Triversity POS solutions); and base finance and HR solutions. SAP for Retail helps retailers of all sizes to create shopping experiences that their customers will want again and again, by providing the ability to make the right decisions quickly and profitably. Today, 33 of the top 50 global retailers run SAP. (Additional information at http://www.sap.com/retail/).