In Mintel’s recent white paper, ‘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.
Here, we discuss how Asia’s massive and diverse population is creating an environment for ‘new retail’ to thrive.
Asia’s population is rapidly urbanising into some of the world’s largest cities. The critical mass of humanity living across Asia, together with the need for faster development in this day and age, represents a unique logistical and institutional challenge. However, ‘new retail’ offers a one-of-a-kind solution to reaching the region’s massive population.
‘New retail’ is already spreading rapidly across Asia through the influence of China’s leading operators. Alibaba, for instance, made investments in Southeast Asian e-commerce portal Lazada, increased its share in Singapore-based SingPost, as well as broke ground on its eHub in Malaysia. This year, Alibaba also became the biggest shareholder of India-based online grocer Bigbasket. JD.com, on the other hand, has invested in Vietnam-based Tiki.vn and Thai online fashion label Pomelo. Meanwhile, TenCent has invested across several media spheres in the region.
On top of retailers and online platforms, these Chinese e-commerce giants are also investing in almost every aspect of the consumer sphere, including finance, cryptocurrency, banking, transportation, travel and tourism, as well as media and entertainment, among many others.
According to the International Monetary Fund (IMF), Asia-Pacific remains the strongest economic growth region in the world, with domestic consumption being a key factor in that growth scenario. It is this consumer growth that is luring big online retail platforms to invest in growing ‘new retail’ across the region. In addition to the big Chinese players, global online retailers like Amazon are also investing heavily in developing the market.
Urbanisation is likely to be significantly influenced. Not only will bigger cities create more concentrated numbers of consumers, the cities will also have to adapt to new technology.
Straight to you
Asia’s population density and pressure for space have pushed up property prices, forcing the need for greater efficiency in use of space. This, in turn, has led to the ‘rent-a-life’ economy where people are increasingly renting rather than buying.
Megacities, where highly concentrated populations are putting severe pressures on transport and other infrastructure, have created pressing needs like increasing efficiency as well as reducing pollution, social stress and wasted productivity. This is driving the existing innovations seen in smart, integrated developments, combining retail, entertainment, working and residential spaces all in one development, as well as locating developments like this adjacent to either existing or new transport hubs.
These are all creating environments where consumer services as well as shopping can be brought to people’s doors. Whether it is food by drone, car repair, or just about anything that can be delivered, mobile app development is combining with population density to create opportunities for more ‘to your door’ services. This is all aligned with Mintel Trend ‘Straight to You’ which highlights how consumers are expecting products and services to be brought directly to them, wherever they are.
Source: Taobao (淘宝)
Alibaba, for instance, has recently launched a new feature on Taobao (淘宝) that lets users seek medical advice or medication whenever required. Users can search the term jiyongyao (急用药), which translates to ‘need medicine urgently’ on the platform and be directed to a page where the options for over-the-counter medicine or medical advice can be found. According to Alibaba, orders for medication can be fulfilled within 30 minutes during the day and an hour at night.
