According to the Report Assofranchising Italy 2020, relating to the data of the sector as at 31 December 2019, last year the affiliation sector recorded particularly positive numbers, reaching over 26 billion euros in terms of total turnover, up by +4,4% compared to 2018. Not only the turnover, but also all the main performance indicators relating to the sector grew in 2019.
They register:
- a total of 56.441 stores, up by +4,7% (2.555 stores opened in 2019);
- a total of 217.150 workers employed in the networks, up by +5% (10.359 new jobs created);
- 980 brands active in Italy (with an increase of +2% compared to 2018) of which 880 Italian (90%), 71 masters of foreign franchisors in Italy (7%), 29 foreign formats operating in Italy but with registered office in a foreign country (3%);
- a group of 11.035 Italian points of sale in foreign markets in franchising (+1,8%);
- 178 Italian networks present abroad (+2,3%).
Over the past ten years, franchising has grown, on average, by +2% each year, creating around 37.000 new jobs. To date, the entire franchising system employs more than 217.000 people, who contribute to generating over 26 billion in turnover (1,3% of GDP). The prerequisite, like all models based on cooperation and risk-sharing, must be sought in market competition: in this regard, consider the benefits for both parties involved, franchisor and franchisee, such as increased visibility and recognition national and international shared brand, the transfer of know-how, the use of the entrepreneurial formula that characterizes the brand, or the expansion dictated by the growth of the points of sale.
According to the information provider eMarketer, e-commerce is expected to continue to grow at a rapid pace of 19% in 2020 and account for 16,1% of global retail sales. This change has paved the way for the emergence of new players, such as Amazon, the global leader in e-commerce, whose sales increased by 31% between 2017 and 2018. It has also weakened some long-standing companies in the sector, particularly in advanced economies, as demonstrated by the fate of the American group Sears, which went bankrupt in October 2018 and was no longer able to adapt to the competition from online shopping. Conversely, Walmart's strong financial health is in part due to the group's ability to take advantage of market developments and diversify its distribution channels. In June 2019, Walmart introduced a new unlimited home delivery service for groceries, which matches what Amazon already offers. Thus, while e-commerce still accounts for less than 10% of Walmart's sales, this business segment is rapidly expanding (+40% in 2018).
China remains by far the largest e-commerce market with 54,7% of global sales in 2019, up 27,3% compared to 2018. In this regard analysts a growth of 24,3% in 2020. This dominance is partly explained by the number of online shoppers: nearly 700 million people say they make at least one online purchase a year, compared to 200 million in the US. Furthermore, Chinese e-commerce is unique in terms of its domestic share, as it now accounts for more than a third of retail sales and could surpass physical sales as early as 2021. This growth is driven by several factors, such as the increase in average salaries, the widespread use of smartphones, urbanization and the expansion of applications such as WeChat, which, in addition to being a social network, can be used to make many types of online purchases. WeChat now has 600 million regular users. Chinese online sales are dominated by the Alibaba group, which derives most of its revenues from this market, although it is looking to expand internationally.
More trends are at work and could transform the retail landscape in the coming years. First, the use of analytical tools related to data collection is likely to be intensified within stores, for example to manage inventory more effectively. Second, firms are making major changes to their offerings in advanced economies to respond to consumer preferences. One approach is concept store development where online retailers partner with brick and mortar stores to create themed outlets that seek to enhance the consumer's shopping experience. The desire among consumers to buy more personalized products could also change the strategies of retailers, as companies take advantage of the greater availability of data on consumer profiles and buying habits to offer products more in sync with different categories of buyers and purchasing regions.
