Growth of the “small screen” moves retailing online
I always relish the opportunity to take Retail University courses abroad. Inevitably, I find that the Professor learns as much as the students. While much of US and western European retail has been homogenized by the large big box chains, Asia is truly a land of diversity in retailing. There is nothing like first-hand experience of visiting retail stores in Asia. But, the biggest retail trend is not about stores … it’s happening online! Read on to discover a new resource to watch the trends unfold in Asia.
Singapore – Crossroads of retailing in the “East”
Night life and retail come alive at Marina Bay Singapore after dark.
Our Retail University workshop was held in Singapore, which was not surprising since Singapore has been a port of call and crossroads for travelers in the east for a long time. One only needs to look at the harbor to see the ships still stacked up for miles. Singapore is a natural meeting place for Asian Pacific countries and China.
Not only has Singapore catered to tourists and international shoppers, shopping is literally the national past time for this small island nation. You will find shops of all major brands in the high end malls that rival anything you would see in the US or western Europe.
The trend to watch is small screen, not retail shops
What I noticed on this trip, more than anything else, was the amount of people with smartphones. Over 70% of Singapore citizens own a smartphone, and they average 1.5 mobile contracts per user. But as a crossroads of the East, you have the opportunity to watch all the visitors, especially those from China, use their phones while they shop.
As the “retail guy” I also went out to explore the retail stores in Hong Kong on my layover. The diversity of the shops and shopping in Hong Kong defies description. But, the overwhelming trend that strikes you is how many use smartphones while shopping. It is simply amazing to watch people standing in the stores checking prices, or shopping for something entirely different while waiting for a clerk in the clothing aisle.
BRIC is no longer emerging – They are set to explode
BRIC has long been an acronym for Brazil, Russia, India, and China. They have historically been described as “emerging” or developing markets. In terms of retail, they are set to explode in growth. The retail press headlines are dominated with stories of key brands rapidly expanding in these markets, especially China. In fact, Bloomberg reported that Forever 21 is paying $1.4 Million per month for rent in their Hong Kong store just to get their brand launched in Asia.
Singapore's malls and luxury stores rival those anywhere in the world.
The branded luxury shops are always interesting and make for sexy headlines. But, the real story in these dense urban markets is the exploding growth on online internet sales. The China Post recently reported that the amount of luxury goods purchased online in China last year already exceeds that purchased online in the US.
Even a very small percentage in the single digits of the population of China or India’s growing middle class quickly dwarfs the entire population of US consumers.
A new retail resource to watch Asia trends unfold
We have long been a big proponent of reading “Smartbriefs” to track trends in retail. One of our new favorites for Asia is Penn-Olson. A recent post by Julia Zhu documents the explosive online B2C growth in China. The best part is that she uses some creative “infographics”.
That’s right, at the end of 2011, 200 Million Chinese shopped online!
Amazon is far from the top player in the Chinese market. And, in addition to traditional B2C retailing sites, China has a number of “group buying” sites that are garnering sales and millions of users as seen in the graphic below.
What does all of this mean for vendors and suppliers?
Hong Kong is an example of Asia's dense urban markets that make smartphone internet shopping a natural.
In the US, consumers still drive to shopping malls and stores. However, the growth of Amazon and other online retailers is quickly challenging the big box retailers, who have expensive stores to operate. In dense, urban markets of Asia where a short cab ride can take hours, the growth of online shopping is a natural phenomenon, which parallels the growth of smart screens on phones and tablets.
In addition to working on localizing store merchandising for Asia, suppliers need to increasingly focus on:
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Getting products on top Asia online retailers
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Customizing content and landing pages for Asia online
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Optimize graphics and content for mobile screens
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Track and pilot opportunities for mobility marketing
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Learn how to do business with telcos and carrier stores
Multi-channel retailing has become a reality worldwide. To lead in Asia it might be more important to focus on mobile and online first.
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Sources:
- Photos courtesy of Chris Petersen
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