2018 RETAIL ASIA-PACIFIC TOP 500
AUSTRALIA
Retailing experiences modest
growth
Over the review period, retailing in Australia
experienced a positive performance. Despite
weak growth in wages and rising household debt, the strong
housing market, supported by low interest rates and growth
in household credit, encouraged consumers to spend, as the
perceived value of their assets increased. However, retailing will
face challenging times, as a slowdown in consumption growth
is expected in the foreseeable future.
Online sales continue to experience stronger growth
than overall retailing
Internet retailing in Australia experienced strong growth over the
review period. The rising importance of having a retail presence
across multiple channels encouraged retailers to invest heavily in
omni-channel offerings, with a particular focus on their digital
presence, as consumers continued to favour the convenience and
price-competitiveness offered by Internet retailing.
Grocery retailers see faster growth than non-grocery
retailers
Grocery retailers experienced stronger growth than non-grocery
retailers in the review period. This growth can largely be ex-
plained by the success of discounters, which continued to gain
relevance through the aggressive expansion of Aldi. Supermar-
kets, particularly Coles, performed well over the review period,
while Woolworths is in the midst of a transformation strategy
to revitalise its sales in the supermarkets channel.
Wesfarmers continues to lead retailing in 2017
Wesfarmers was the largest retailer in Australia in 2017, leading
across multiple retail channels. The company’s value sales growth
is largely driven by its strong performance in channels such as
home and garden specialist retailers, stationers/office supply
stores and mass merchandisers. Wesfarmers is committed to
investing in value, customer service, its stores and its website,
along with offering an improving range of merchandise across
its retail businesses.
Modest growth ahead
Although retailing in Australia is expected to see a positive
value CAGR at constant 2017 prices over the forecast period,
the overall economic outlook in Australia is
expected to slow down. Low growth in wages
and high mortgage stress are expected to impact
the growth of consumer products, and thus the
growth of retailing.
— Hianyang Chan,
Senior Analyst
CHINA
Retailing sees an increase in value
growth in 2017
Overall retailing saw a pick-up in current
value growth in 2017, driven by the rebound
in value growth in supermarkets, hypermarkets, traditional
grocery retailers and homeshopping compared with 2016, in
addition to the continued robust double-digit value growth
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Retail Asia June/July 2018
OV E R V I E W
in Internet retailing in China. Chained players in supermar-
kets made efforts to boost shoppers’ experience in small-and
medium-sized outlets located in neighbourhoods, with free
home delivery to promote sales, while homeshopping recov-
ered from decline by catering to consumers’ on-the-go pur-
chases via smartphone apps launched by players in this channel.
An omni-channel strategy is emphasised by more
retailers
To stay relevant amid the highly intensifying competition, more
retailers adopted an omni-channel strategy. Leading mixed retail-
ers such as Hefei Department Store Group and Parkson Retail
Group set up online shopping platforms to offer a wide range of
products, providing value-added services for consumers. Mean-
while, many department stores started click-and-collect services
to facilitate the collection of goods at physical stores after placing
an online order. On the other hand, online retailers were busy
opening bricks-and-mortar stores, represented by JD.com, which
launched its first convenience store in June 2017, and plans to
open one million outlets in five years in rural areas of China.
Non-grocery retailers continue to thrive
Despite a larger value sales base, non-grocery retailers continued
to outperform grocery retailers in 2017, mainly fuelled by the
vigorous double-digit growth of variety stores and warehouse
clubs. A wide range of quality products at wallet-friendly prices in
variety stores appealed to consumers in pursuit of lifestyle shop-
ping, while warehouse clubs continued to attract local consumers
by offering enriched product portfolios, including groceries, at
competitive prices. On the other hand, grocery retailers faced
mounting pressure, especially from leading Internet retailers,
which ventured into bricks-and-mortar stores, represented by
Hema supermarket, which has been under Alibaba since 2016.
Alibaba consolidates its lead amid intensifying
competition
Alibaba Group Holding further consolidated its GBO leadership
in retailing in a highly competitive market in 2017. This was
underpinned by its pioneering position in the booming Internet
retailing channel, and the new retail strategy put forward by its
founder, Jack Ma, to unfailingly cater to consumers’ changing
needs. Domestic players continued to lead amid the intensifying
competition, represented by Alibaba, JD.com, GOME Electri-
cal Appliances Holding and Suning Commerce Group, while
multinational players such as Wal-Mart and Amazon are making
efforts to