Brazil has emerged as a top destination for specialty retailers, according to the 2012 Global Retail Development Index (GRDI) by AT Kearney Global Consumer Institute.
Growing middle class economy, high consumption rates, large urban population and reduced political and financial risk were the main factors behind Brazil's performance.
Chile, which is second in the index, is considered one of the competitive retail markets in Latin America and inflation in the country is low.
China has moved up from sixth to third rank in the 2012 GRDI and the nation's future retail growth remains positive, with double-digit annual sales growth expected.
Uruguay stood at fourth position in the ranking list, as the country's high urbanisation and strong consumption levels are attracting retailers.
India secured fifth rank in the 2012 GRDI and remains a high-potential market with accelerated retail market growth of 15-20% expected over the next five years.
The changes in FDI regulations have provided an interesting dynamic to several international retailers' entry and expansion plans for India.
Although the Arab Spring uprisings had a negative impact on the rankings of several MENA countries, the UAE, Oman, Kuwait and Saudi Arabia remained still high on the ranking.
AT Kearney partner and study co-leader Hana Ben-Shabat said that talent identification and development is just as important to successful market expansion as an underserved market and a growing consumer base.
"Wage inflation and staff turnover are significant obstacles for retailers entering many of the top developing countries," Ben-Shabat added.
Published since 2002, the GRDI analyzes 25 macroeconomic and retail-specific variables, and ranks the top 30 developing countries for retail investment worldwide.