02 Mar 2017
SINGAPORE, March 3rd, 2017 – IDC Retail Insights recently published the report, Perspective: Asia/Pacific Excluding Japan (APeJ) Retail Industry Update, which highlights that the Asia Pacific retail sector grew 13.63% CAGR from 2010 to 2016 Due to cross border e-commerce, demographic changes and rising income in the region. The report also examines the impact of online retailing on brick and mortar retailers.
“Asia/Pacific remains the most dynamic amongst country economies despite facing heightened uncertainty from a still weak global recovery, slowing global trade, and the short-term impact of China’s growth transition. This slowdown, however, was not seen in a transformative retail industry, where tech-enabled capabilities have brought stiffer competition between traditional and online retailers,” says Mike Ghasemi, Retail Insights Research Director, IDC Asia/Pacific.
Cross border e-commerce is becoming one of the more popular retail channels among shoppers and is driving the retail sales growth in the region. The millennial generation in Asia has established their own unique shopping behavior e.g. actively using social media to search for new products and new shopping experiences. This has created a new customer loyalty phenomena enabling retailers to connect with their customers anywhere, anytime. Moreover, the urbanization and a rising middle class income will continue to help fuel consumption, thus driving the retail volume growth in Asia/Pacific.
Ghasemi adds, "Regional retail growth will continue to be propelled by online retail sales, lower commodity prices and disposable income growth, along with macroeconomic stimuli and government policies. Mobility, social, IoT and augmented reality technology will play an important role in retail industry and will be the key differentiators."
In 2017, expect brick and mortar retailers to face a challenging yet exciting year as the cost of reaching out to consumers in other countries become more affordable and easier thanks to mobility, social and cloud technologies. Asia is expected to continue to be a driver of global retail growth and to introduce new innovation in e-commerce and customer shopping experience. While differentiating e-commerce platforms in an increasingly crowded market is crucial for retailers, however, they must also invest in infrastructure and back-end enterprise software such as supply chain management, analytics and cognitive technology. They also need to look for logistics partners who are able to support the multi-location, multi-transfer, and integration of business information and goods in a secure and reliable manner.
The report tracks GPI growth metrics from a sample of over 400 publicly operated firms from 14 countries in APeJ. GPI is an indicator of the performance of APeJ retail, which is based on the performance of selected companies from the constituent sub-industries of the retail industry. It also reviews the retail net profit margin and inventory trend and factors contributing to declining profitability in retail sector.
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