The report noted that the combined retail sales in retail powerhouses Singapore, Indonesia, Malaysia and Thailand are expected to grow from US$650 billion last year to $1 trillion in 2018, at a rate of 15.5 per cent annually.

The four countries together made up 76 per cent of the $2.45 trillion (Bt86 trillion) Asean economy last year.

The study, compiled for the Singapore Exchange (SGX) by research firm Frost and Sullivan, noted that much of the growth in the sector is driven by the Asean market’s strong fundamentals – a young, fast-growing population, emerging middle-class consumers and robust gross domestic product growth.

Indonesia and Malaysia show the biggest potential among the major Asean economies in leading the retail boom, said the report.

The retail sector in Indonesia is forecast to rise 19.3 per cent annually to reach $639 billion in 2018, while Malaysia is poised to grow 12.1 per cent each year to $151 billion.

Thailand is projected to increase 8.9 per cent annually to $155 billion over the same period, while Singapore, a mature retail market with a high number of global retailers, is expected to expand 6.4 per cent a year to $56 billion in 2018.

The report noted that slowing demand from population ageing, rising business costs, the possibility of a dip in tourist arrivals and falling consumer confidence remain crucial challenges for the sector in Singapore.

But it added that the country continues to enjoy a high GDP per capita, which is likely to further increase and provide a strong base for the retail market, helped by low unemployment and a fully urbanised population.

Online retail is another key growth area, although this will expand at a pace that is slowest in the region.