Matthew Crabbe
Matthew is Mintel's Regional Trends Director for Asia Pacific. He provides insights and analysis on the latest market developments and consumer trends across the region.

In Mintel’s new whitepaper, ‘New Retail: The Futurenomics of Asia-Pacific’, we paint a picture of what the future will look like for the economy based on existing trends and trajectories in Asia’s ‘new retail’ scene, and its influences already being felt across the region.

In this blog, we discuss how online-offline integration is creating a new environment where ‘new retail’ technologies can now find their niche.

‘New retail’ is a process, rather than a market, where the new ‘space’ of e-commerce increasingly integrates with physical shopping spaces. In China, where this process is arguably the most advanced globally, Alibaba has led the ambitious drive towards this integration through its online-offline supermarket chain Hema.

However, ‘new retail’ is just part of a wider integration process. Smartphone app technology is leading to online shopping integrating with wider consumer services—from car-hailing to food delivery apps—into a broader digital consumer environment. Mobile social media apps, such as Tencent’s WeChat, are well-advanced in integrating features of other apps to create ‘uber-apps’, in which a suite of services applications create an all-in-one services, shopping and lifestyle interface.

32% of Thai consumers say they are spending more on leisure and entertainment

This integration of interfaces is reshaping consumer behaviour in China, and increasingly, this trend is percolating across Asia-Pacific. Along with the change in consumer behaviour, this mobile e-commerce integration is blurring the lines of where and when people shop, work, rest and play. Places and processes for shopping, for instance, is merging with entertainment, travel as well as socialising—aligning well with the 32% of urban Thai consumers who say they are spending more on leisure and entertainment. This alters the way companies and brands need to engage with new consumer behaviours and environments, especially as everything is mixing up!

The potential for ‘new retail’ technologies

‘New retail’ technology can not only be more responsive to wider consumer service needs, but also to consumer proximity. Unmanned convenience stores are moving from the test to roll-out phase as part of the ‘new retail’ push, allowing retailers to open wherever consumers want stores to open, or even for stores to travel to where the demand is—like that of BingoBox in China.

Source: BingoBox

The developments found in ‘new retail’ are also challenging the use of physical space. Not just with stores, offices, apartments and public spaces, but also potentially with products and packaging. Without standard format stores, packaging and product design no longer need to fit standard supermarket shelves—creating more demand for packaging-free products to save on waste. And of course, the smartphone will remain a popular product, but its value is less in the device itself, but rather in the content and applications it delivers, as well as the data it generates.

This convergence and integration of ‘new retail’ technologies is turning the traditional economic model on its head. Inhabitancy and usage is becoming more important than possession. Definitions of work, shopping and leisure space are becoming increasingly blurred by ‘new retail’ economies. Holiday destinations can become places to work, network, and even seek healthcare, rather than simply places to rest and play. Public spaces can also become temporary commercial service stations, like the 24/7 gym pods by Mipao Technology that popped up in public spaces throughout Beijing, China.

Asia-Pacific’s rapidly developing economies are proving to be the ideal testing grounds for such new innovative, integrative technologies. The region offers willing, anticipatory consumers, eager for improvements and less tied to traditional legacy technologies because their economies are still underdeveloped. Asia’s diverse, fragmented geography and massive population also creates significant needs that ‘new retail’ technology is best placed to serve.

Download your free copy of Mintel’s ‘New Retail: The Futurenomics of Asia-Pacific’ whitepaper here.