2018 RETAIL ASIA-PACIFIC TOP 500
OVERVIEW were present online , and vice versa . As a result , what consumers started to seek was an end-to-end , completely seamless experience . For instance , a product bought online could be picked up from a store , or repaired at a physical store , or could be returned or exchanged at a store . Similarly , if a product was bought offline and there were issues with it , consumers preferred to use the online channel for complaints . Shopping was no longer about a retailer or a channel ; it reached a level where consumers preferred retailers which allowed them channels to interact with them directly , both online and offline . This became even more prevalent due to the rise of mobile Internet retailing , which allowed consumers to constantly be in touch with the retailer , from the point of research to the acquisition of the product .
Technology becomes an intrinsic part of retailing in 2017 Technology became an intrinsic part of retailing in 2017 . From the consumer ’ s perspective , the use of smartphones to research information about a product , find the best price offered by retailers and buy it became a very common practice . Even when it came to payments , due to demonetisation , the use of payment wallets and cards became a common phenomenon for most retailers . The use of smartphones was also a common practice for offering discount coupons with QR codes . In general , with the help of smartphones , the entire retail experience went through phenomenal change . One of the most successful strategies employed by retailers was the use of social media to address consumer grievances . Irrespective of the retailer being online , offline , mobile or omnipresent across all channels , retailers responded to any complaints posted on social media immediately , within 24 hours .
From the perspective of retailers , the use of technology was visible in terms of their product displays and social media presence . Van Heusen set up a virtual mirror in one of its flagship stores in Bangalore ; consumers could stand in front of the mirror and try on clothes virtually , without having to actually try them on . Similarly , Soch , an Indian clothing retailer , had videos of models exhibiting its latest collections right in front of the entrance of the stores , generally on the store entry walls . These practices helped retailers attract footfall to their physical stores , helping consumers to engage in the whole retail experience .
Convenience emerges as the strongest parameter when choosing a retail channel One of the key shifts in retailing practices in India was observed in the selection criteria . Indians were driven more towards price than any other parameter when making a decision regarding their retailing habits . However , over the course of 2017 , what emerged as a strong parameter for consumers in their selection process for products , channels and brands was convenience . Indian consumers , primarily millennials with higher disposable incomes , did not mind paying more for a retailing experience which was more convenient than the cheapest option . This was prevalent across both grocery and non-grocery retailing . Consumers in metropolitan cities preferred to order their groceries online , even if the price was marginally higher than the small neighbourhood kirana stores . This was driven by the convenience that the online channel offers , which kirana stores do not . Similarly , for non-grocery products , consumers preferred retailers which had a presence across both online and offline channels , as it allowed them to have a more seamless experience , and more options from which to choose in terms of delivery , products and payment .
Second- and third-tier cities become the new target for expansion for modern retailers One of the primary challenges that retailers face in India is a lack of good real estate locations at reasonable prices in urban areas of the country . The presence and expansion of organised retailers is very dense in urban areas . Metropolitan cities such as Delhi , Mumbai , Chennai , Kolkata , Hyderabad and Bangalore are among the most sought-after for retail presence and location . However , real estate prices are consistently high , which is a major cause of concern for retailers . As a result , retailers started to look at second- and third-tier cities . Apart from real estate prices , another reason why second- and third-tier cities have become lucrative for expansion is the rising demand from semi-urban consumers for brands . The lack of presence of most international brands and a major proportion of national brands in these areas led consumers to resort to the online channel . Retailers have realised this new market , and naturally plan to tap into it . A few retailers who have already expanded in these areas are D-Mart , one of the fastest-growing hypermarkets in India , which opened a new store in Zirakpur , a satellite town in Mohali , Punjab . Similarly , BigBasket . com , a leading online grocery retailer , delivers to Huskur Village , which is outside Bangalore , and H & M opened a store in Mohali , Punjab .
Private label becomes a major source of income for retailers Grocery , non-grocery and Internet retailers focused heavily on private label brands in 2017 . Consumers were no longer only price-specific , they cared more about the quality of products . As a result , brand loyalty witnessed a dip among consumers , which led to an increase in private label consumption , as consumers were more interested in the product than the brand . Furthermore , private label products are often priced marginally lower than national brands , and the quality is similar in both cases , thereby giving more incentive to consumers to buy private label . BigBasket . com ’ s Fresho brand in fresh food and vegetables has been a success for the retailer ; similarly , it is now common for consumers to buy Spar ’ s private label groceries . This is also visible in non-groceries , whereby Shoppers Stop , one of the leading department stores , has 16 private label apparel brands .
— Shekhar Anand , Analyst
INDONESIA
Changes in consumer behaviour significantly weaken the retailing industry Given Indonesia ’ s large population and current demographics , coupled with favourable governmental policies that encourage the nation ’ s economy to grow , the country is deemed as a potential market for not only local players but also foreign players . However , currently the growth rate in Indonesia ’ s retailing industry does not look as enticing as before . This is due to several factors . From a macroeconomic perspective , the weak start to 2017 ’ s consumption rate was attributed to lower income growth , followed by increased electricity rates for the middle-income population . It could
46 Retail Asia June / July 2018