FEATURE
By: Jo Ann Reddy, Euromonitor International
The retailing landscape in
Southeast Asia has been
influenced greatly by the rise of
e-commerce platforms which
have prompted a marked shift in
consumer behavior. Here’s a
brief overview of the main
trends that are driving the
rapidly changing retail landscape
in this region:
Internet retailing is experiencing
dynamic growth across
Southeast Asia
A whole host of major players have
joined the digital retailing sector
across Southeast Asia, with most
countries experiencing healthy
double-digit growths in e-commerce.
This is mainly due to increased
communications infrastructure and a
high penetration rate of smartphones
in both rural and urban areas, which
has led to traditional retailers
expanding their operations into
digital streams in order to remain
competitive.
Brick and mortar is here to stay
Despite the aforementioned
propagation of e-commerce
throughout the region, the outlook
for brick and mortar stores remains
bright, with a majority of consumers
still preferring to visit physical stores
that provide a tangible experience
when it comes to selecting and
purchasing products. There is
however, an evolution in terms of
how brands are presenting
themselves with companies
attempting to make visits to physical
stores more of an experience through
redesigns and renovations, while
simultaneously creating seamless,
omnichannel streams for customers
to browse and purchase their
products both online and offline.
Informal retailing is still a major
player
Informal consumer-to-consumer
retailing remains a strong competitor
to both traditional and digital
companies throughout the region.
Social media networks and apps such
as Carousell and Sendo are
increasingly being harnessed in order
to create a secondary trade market for
both new and used goods in Indonesia,
Singapore, Malaysia, Thailand,
Philippines and Indonesia, especially
in the electronics and apparel
industries. In countries like Vietnam
and Myanmar, informal retailing
comes mainly in the form of street
vendors and remains a much more
convenient option to traditional
retailing in both rural and urban
settings.
Cash is still king (for now!)
While financial institutions have
been heavily promoting the use of
cashless transactions across most
Southeast Asian markets, cash
remains the preferred form of
currency for everyday usage
throughout the region. Acceptance
rates for modern payment methods
using near-field communication
technology or QR code scanning are
still relatively low outside of major
cities but are being adopted quickly
within them especially by newer
companies.
Lifestyle and luxury brands
target SEA’s rising middle class
With a relatively young and
increasingly financially powerful
middle-class growing across the
region, it should not come as a
surprise that major international
retailers are flocking to Southeast
Asia in order to capture their share of
this lucrative consumer segment.
However, despite their increasing
presence in developing markets, they
are generally expected to form just a
small part of overall sales as they are
limited to central urban areas due to a
distinct lack of purchasing power and
disposable income outside of major
cities.
On the whole, the Southeast Asian
market still contains vast potential,
as improved logistics, infrastructure
and payment methods connect
retailers with a brand-new
generation of consumers.
As a retailer, are you prepared to take
on the challenge of reinventing your
brand to access this lucrative market?
For more information, please contact
[email protected].
About the Author
Jo Ann began her career as a marketing
professional and has spent over sixteen
years in brand management, consumer
behavior, marketing communications and
business development. At Euromonitor,
she currently leads a team of client
consultants as a Senior Regional Division
Manager, and services a diverse array of
top multinationals. She is passionate in
helping clients reach their full business
potential by understanding their market
needs and matching it to the services
offered by Euromonitor.
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