Philippine Retailing 2019 Philippine Retailing 2019 Q4_Digital - Page 18

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 infoSG@Euromonitor.com. 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. 16