2018 RETAIL ASIA-PACIFIC TOP 500
tailing in smaller or more rural areas, small independent grocers
and wet markets dominate. Moreover, with the rapid growth
of e-commerce, many of these independents are turning to the
e-commerce model, as well as utilising mobile platform applica-
tions, to increase convenience for consumers when purchasing.
Social media platforms such as Instagram and Facebook are
used to help these independents connect with
consumers. This trend is especially prominent
in urban areas. Indonesian consumers welcome
such methods to accommodate their needs.
— Chayadi Karim,
Analyst
JAPAN
Lifestyle trends impact retailing
Retailing in Japan showed only marginal
current value growth in 2017. Despite
the stable economic conditions, consumer
confidence was on a downturn due to the insecure outlook,
stemming from the ageing of the population and depopulation
in Japan. The younger generation, in particular was pessimistic
about the economic outlook in Japan, and tended to spend
less than the middle-aged and older groups. Spending patterns
were also shifting from materialistic possessions to experiences
and sharing, affecting consumption in retail channels. Mean-
while, major contributors to growth were convenience stores
and Internet retailing, which met the current demographic
and lifestyle patterns in Japan. Many store-based retailers were
actively investing in engagement with online retailing: build-
ing or enhancing their omni-channel business structure due to
the expansion of e-commerce. This factor is likely to stimulate
growth in retailing over the forecast period.
Changes in tourist spending impact retailing
The increasing number of inbound tourists is one of the key
growth drivers in retailing in Japan. The Japanese government is
aiming to increase the number of inbound tourists to 40 million
in 2020 and 60 million in 2030, up from the 24 million tour-
ists who visited the country in 2016. Retailing benefited from
a surge of shopping tourists from China in particular over the
review period, although this high spending slowed from 2016
due to several factors. These included the stronger yen, the
regulation to limit the value of overseas withdrawals by China
UnionPay customers, imposed by the Chinese government, and
the expansion of cross-border online transactions. As a result,
department stores and electronics and appliance specialist retail-
ers were largely affected by diminished spending. Meanwhile,
many Japanese retailers are shifting to strengthen cross-border
online transactions, aiming to benefit from changes in consum-
ers’ spending habits.
Growth driver in grocery retailers
Grocery retailers are expected to reflect demographic changes,
with two main factors evident. One of these is the ageing society
in Japan. The population over 65 years old reached 27% of the
total population in 2017. Among these, the proportion of peo-
ple over 75 years old is expected to overtake the proportion of
those 65-74 years old in 2017. While many people aged 65-74
remain active and healthy in Japan, people aged over 75 tend to
face more health problems and become less active. Due to low
mobility, there is more demand for grocery stores in small local
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Retail Asia June/July 2018
OV E R V I E W
trading areas; therefore, the number of such stores is expected
to increase, responding to the ageing society. Those aged over
75 tend to be single, so they prefer to buy ready meals, as many
of them are reluctant to cook from scratch. Hence, the demand
for ready meals offered by grocery stores is likely to expand
further. Meanwhile, with the increasing number of working
women, many spend less each visit when grocery shopping, and
seek convenient and time-saving options. They tend to shop for
grocery items at supermarkets and convenie