2018 RETAIL ASIA-PACIFIC TOP 500
OVERVIEW
HONG KONG
Retail sales regain traction Recovering local consumption and returning tourists resulted in growth in Hong Kong ’ s retailing market , after two years of decline . Retailing in Hong Kong also witnessed a trend towards further consolidation . Luxury apparel and footwear as well as lifestyle and personal goods retailers sought to find store closures and then revamped their retail formats and channels . International brand retailers sought to expand not only into different retail channels , but also within their core markets . At the same time , both modern and traditional grocery retailers performed consistently , presenting an overall positive performance with relatively small volatilities over the review period . Indeed , retailers in Hong Kong have been adjusting their business strategies , striving to boost sales in such critical times when e-commerce advances and consumers ’ minds change quickly .
E-commerce continues to grow On one hand , Hong Kong is one of the most densely populated areas in the world with extensive networks of physical stores ; on the other hand , it enjoys high computer literacy and easy access to the Internet . The e-commerce trend continued to progress with the support of various electronic payment methods , myriad delivery options and wide product ranges of increasing online marketplaces . During the review period , store-based retailers moved online and pure Internet players were emerging and developing . Neither blindly poured resources into just expanding marketplaces in the virtual word ; instead they actively built omnichannels to deliver convenience to the city ’ s busy consumers . They are now trying hard to overcome the challenges of tracking sales , data analytics , inventory management and providing same-day delivery and pick-up services . Many of them do not stay with their original selling channels but pragmatically travel between electronic platforms and bricks-and-mortar stores , taking the respective advantages of both , which leads to channel blurring and strategic agility as well as advancements in diverse e-commerce options .
Pop-up stores for bargaining growth As rent continued to stand high , store-based retailers abandoned the conventional way of expansion by investing in permanent outlets ; instead , they increasingly utilised pop-up stores to bargain for growth . They set up temporary outlets in popular malls , famous tourist spots , or any areas without a prior presence to extend the brand and introduce signature products . The bricks-and-mortar retailers were not alone ; online brands also joined the trend to maximise exposure , bringing forward the brick-and-click format . In addition to off-price retailing , flash retailing is becoming popular among consumers . The city ’ s fresh hunters enjoy festive sale events and ceaseless updates in the variety of shops .
The rise of convenience economy Convenience stores were demonstrating great synergies , unleashing growth potential . 7-Eleven and Circle-K in Hong Kong lined up with international pure online retailers including Taobao , ASOS and Zalora for provision of easy pick-up and return services . The IT infrastructure and logistics management advanced towards the end of the review period . In view of how convenience-savvy consumers are nowadays , convenience stores are responding by modernising and evolving to become more than a place to buy a quick snack and grab some on-the-go beverages . They now venture to become a part of people ’ s daily routines . Furthermore , vending companies have also delivered new machines with interactive features and updated technological traits . In the contemporary age , retailers increasingly offer tangible commodities , intangible experiences and convenience .
Economic outlook Even though the recovery of tourism has driven growth in retail sales , it is too early to expect a sharp rebound . Many tourists from mainland China , who have been the pillar of the city ’ s retailing industry , no longer consider Hong Kong as their prime destination but prefer other Asian regions such as Korea and Japan , where the latest fashion and gadgets flourish . They also travel to western countries for foreign goods , seeking to satisfy the bourgeois lifestyle ideals in their desires . Furthermore , China ’ s economic growth has been slowing and the Yuan renminbi is depreciating against the local currency . The business environment ahead is still full of uncertainties .
While it is unlikely for the tourist sector to restore to its previous momentum , local consumption power is stable . Hong Kong ’ s unemployment rate is consistently low and the average income is spontaneously increasing . As retailers have been adapting to the changed preferences of the tourists and aim their strategies on the local market , it is anticipated that many trade players in Hong Kong will still achieve small growth over the forecast period . The government is also attempting to cool the soaring property market with various measures including increasing the stamp duties , expanding public housing provisions , redeveloping decayed urban areas and encouraging co-living communities . Citizens are going to be slightly relieved from having to save up for mortgages and have more disposable income than before . In addition , the retiring Generation X are rich in capital and enjoy abundant time , energy and leisure for shopping .
Nevertheless , online players are expected to realise significantly higher growth than the store-based players even as Internet retailing of the city is yet to show hints of maturity and saturation . Channels such as apparel and footwear , electronics and appliance , health and beauty , and home and garden are likely to perform more weakly than the others with slower growth rates or declines in the long run , because they are less resilient to Internet retailing .
— Ting Huang , Analyst
INDIA
A seamless shopping experience is the leading driver of growth in retailing Retailing registered steady growth in India in 2017 . One of the key demands from consumers in 2017 was seamlessness in their shopping experience . From 2015 , omni-channel retailing became a common practice among most retailers . The primary reason why omni-channel retailing became popular was consumers ’ need to have the convenience to choose the channel , irrespective of the retailer . In 2017 , consumers went one step further , whereby seamlessness in the entire shopping experience became important . Consumers did not differentiate in terms of channel any longer , as offline brands and retailers
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