ASIA RETAIL FORECAST
BY: SHIRLEY ZHU
Shirley Zhu leads IGD Asia’s research team
in its Singapore office. She has extensive
research experience in the FMCG industry and
has helped many multinational and local cli-
ents achieve their strategic objectives. Her
role with IGD involves strategic planning,
expanding research coverage in Asia and
supporting members in the region.
Asia’s leading convenience retailers are
predicted to grow 6.6% a year to 2022
by US$5.1trillion, according to forecasts
from international research organisation
IGD. Based on a survey of the top 10
Asian convenience retailers, the research
anticipates that convenience will be the
fastest growing bricks and mortar channel
in Asia over the next five years, resulting
from both retailers expanding their
networks and shoppers changing their
shopping habits. Shirley Zhu, Programme
Director at IGD Asia, explores the latest
trends in the Asia convenience channel.
The Asia convenience channel is definitely
one to watch over the next five years with
the strong growth expected for c-store
retailers. Indonesia in particular will
continue to stand out as the fastest growing
retailer country and the increasing number
of single and two-person households is
driving the growth of South Korean retailers,
increasing growth of smaller formats. This
reflects consumer behaviour of purchasing
smaller portions and pack sizes along with
ready-to-eat solutions.
The leading 10 retailers are all Asian-based
business, with all forecast to maintain strong
growth over the next five years. FamilyMart
has firmly established itself as the second
largest convenience player in the region
following the merger of the two retailers,
while Indomaret and Alfamart are expected
to remain the fastest growing retailers. The
increase in smaller households is driving
the growth of South Korean retailers GS
Retail, BGF Retail and 7-Eleven. Likewise, for
Shinsegae, the channel is growing in
Asia’s leading
convenience
retailers in 2022
importance, with sales rising 80.8% in 2017
and investment in rebranding With Me to
E-Mart 24.
Asia’s large and congested cities, growing
young and increasingly affluent populations
are ideal incubators for proximity retailing
– however, formats and retailers are
emerging in many forms, as identified by
IGD’s four main proximity store formats in
the region: CVS, forecourts, neighbourhood
retailers and 1k supermarkets2. CVS and
neighbourhood convenience are the
most widely adopted models currently,
with both specialists and multichannel
retailers operating formats under these
types. 1k supermarkets are a growing
trend, particularly in urban locations where
hypermarket growth is challenging or space
for new stores is limited – these stores serve
limited catchment areas and have high
footfall. Although the model we’ve outlined
provides a nice way to segment customers,
inevitably elements of each type do appear
in other models, resulting in a blurring of
store types.
With the convenience channel expected to
take centre stage in the coming years, IGD
has outlined five priorities suppliers should
focus on to succeed in this area:
Flex your thinking to the operator model
Suppliers should flex their thinking to the
operator model – proximity formats come
in many forms, therefore suppliers should
challenge their thinking around products,
pack formats, promotions and the target
customers.
Build strategic accounts with the big three
Seven & i, FamilyMart UNY and Lawson are
by far the largest operators with pan-Asian
operations, so make sure these accounts
receive the treatment they deserve.
Flex your products and services to the
location
Flex your products and services to the
location: many retailers either flex the offer
and/or the store format to enable them to
target as many locations as possible, so
suppliers should consider where the gaps in
their portfolio are.
Innovation and differentiation are a priority
for CVS
Although price is important, innovation
around products and promotions are a
key differentiation and will target young
shoppers, a key demographic.
Online and digital solutions should be a
focus
Online and digital solutions should be
a focus – all major retailers have online
operations, delivery and collection services
and are experimenting with digital and
mobile, maximise this opportunity to test
and learn.
IGD Asia is a new service aimed at helping businesses trade
more effectively with leading retailers across the region.
Sign up for your free demo now.
DISCLAIMER: The opinions expressed in this column article
are solely by author and do not in any way reflect the
stand or position of the PRA.
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