Asia Retail Market | Mintel

With a population of over 4.5 billion people, Asia represents a huge retail market offering extensive opportunities for brick-and-mortar and online retailers. While the Chinese consumer market is a key part of the region, the Asian retail market as a whole is experiencing unprecedented growth, driven by the region’s massive population, rapid growth of megacities, increasing urbanization pressures and innovative responses in technology.

This growth is not only redefining the retail landscape, but is also creating unique challenges, such as high real estate prices and the need for efficient use of space. Technology is playing an important role in responding to this. Innovations in e-commerce, digital payments and logistics are meeting growing demands for convenience and efficiency. Retailers are leveraging technology to deliver seamless online-to-offline experiences, catering to the fast-changing lifestyles of urban consumers and delivering services directly at their doorstep.

The concept of ‘new retail’ is revolutionizing the Asian consumer experience, particularly driven by the region’s rapid urbanization and digital transformation. As population trends shift from rural to urban areas, new logistical challenges have arisen, and the ‘new retail’ seeks to address the changing needs of APAC consumers. This new retail model is not limited to shopping but encompasses consumer services including finance, transportation, and entertainment.

Driving this change are Chinese e-commerce giants such as Alibaba and JD.com. We are integrating online and offline shopping experiences. Alibaba’s investments in various sectors across Asia, including e-commerce platforms such as Lazada and online Indian grocer Bigbasket, signal its commitment to expanding ‘new retail’ across the region. Even basic retail stores, such as Chinese supermarkets, must respond to these changes. Likewise, JD.com’s investment in the Southeast Asian market further demonstrates the growing influence of Chinese e-commerce in the region.

‘International localism’ is one of the consumption trends in Southeast Asia. Online shopping allows consumers to make purchases across borders. Today, Chinese consumers are already shopping extensively around the world, especially in the Asia Pacific region. According to Alibaba, of the 1.48 billion Singles’ Day transactions in 2017, 60,000 overseas participating brands accounted for a significant portion of a total of 140,000 brands. Moreover, a Mintel survey found that one-fifth of Chinese online consumers who purchase imported food online did so in Japan, South Korea and Hong Kong. Meanwhile, consumers outside of China are shopping from e-commerce powerhouses, especially those in East and South Asia.

Technology integration in retail, including scan security and cashless payments, is changing consumer habits in Southeast Asia. Mintel’s research on consumer digital trends in Asia found that a significant number of consumers in Indonesia and Thailand are using their smartphones for a variety of services, including pre-ordering food and beauty services.

But the human element still matters, as evidenced by the remote assistance capabilities of Chinese unmanned convenience store BingoBox. The combination of new communications technologies, staffless stores, and cashless payments allows retailers to serve more consumers than ever before.

E-commerce is expected to grow exponentially, becoming a critical component of economic growth in the Asia Pacific region and shaping consumer spending patterns across the region. China’s e-commerce market is already playing a key role in driving penetration and innovation with growing regional and global influence.

Brands are increasingly investing in experiences that engage consumers. Called ‘Retailtainment’, the service blends retail and entertainment to create memorable experiences and turn retail stores into event venues. These new retail strategies also provide compelling reasons for consumers to choose one brand over another.

Cross-brand partnerships, such as the Chinese collaboration between fast food retailer KFC and video game CrossFire, meant that the Colonel Sanders character could appear as an in-game persona and that items from the KFC menu could appear as available items in the game. Offline, the mobile platform allowed players to compete in hyper-local events with other players in the same KFC store. KFC also organized an on-site competition at one of its Shanghai stores, where two high-end CF players competed for the title of ‘Ultimate CF King’. The event was live-streamed on several popular platforms in China.

LEGO has launched its first ‘retailtainment’ flagship store in Malaysia in 2021. LEGO delivers retail, discovery and, importantly, play with its innovative store format.

These trends, including the integration of digital technologies in the retail sector, the convergence of various consumer services, and the convergence of retail and entertainment, will redefine the retail environment, driven by China’s e-commerce innovation and growing demand for integrated consumer experiences. .

Take advantage of Mintel’s in-depth market research and explore our extensive China market research today.

Subscribe to our newsletter Spotlight to get free content and insights delivered straight to your inbox.