MINTEL | In Mintel’s latest whitepaper, ‘New Retail: The Futurenomics of Asia-Pacific’, we paint a picture of what the future will look like for the economy, based on existing trends and trajectories in Asia’s ‘new retail’ scene, and its influences already being felt across the region.
In this blog, we discuss the role digitisation is playing in this major market development.
Almost every aspect of a consumer’s life is going digital, be it shopping, payments, education or entertainment. This is redefining how people are using their environments and reshaping them to new uses, as well as challenging the old concepts of where and how transactions happen.
Mintel predicts that e-commerce spending in Asia-Pacific will experience exponential growth in the years leading up to 2025 and it is this growth that is creating a new critical mass with the convergence of online and offline retail and services into ‘new retail’. The online economy is therefore a crucial part of the region’s current and future overall economic growth. It will also be a major part of the continuing integration of the economies and consumer spending patterns across the region.
The China effect
Asia’s heavyweight e-commerce market is China. In fact, when it comes to e-commerce penetration, mobile commerce uptake and ‘new retail’ innovation, China leads not only the region but also, arguably, the world.
As a ‘new retail’ innovator, China’s leading platforms—Alibaba and JD, for instance—are creating new business models for online-offline integration. E-commerce largely removes physical boundaries to what consumers can buy, limited only by the logistics and cost of delivery.
China’s e-commerce has also created convergence of retail with other consumer services, including payments, transports, foodservice and home services. ‘New retail’ is breaking apart old boundaries between urban and rural areas, retail and services, and even national boundaries.
Online shopping allows consumers to buy beyond national borders. As it is, Chinese consumers are already shopping widely across the globe, especially within Asia-Pacific. According to Alibaba, of the 1.48 billion transactions during Single’s Day 2017, much went to the 60,000 overseas participating brands out of a total of 140,000. What’s more, Mintel research reveals that a fifth of Chinese online consumers of imported food products have purchased online from Japan, South Korea and Hong Kong. Meanwhile, consumers living outside of China are shopping from the e-commerce heavyweight—especially those residing in East and South Asia.
Retail + Entertainment
‘Retailtainment’ is a result of the convergence of retail and entertainment. As the world sees a rapid growth in travel and leisure spending among consumers, it is important that brands invest in providing experiences that engage the consumer. In fact, the gamification of ‘new retail’ has generated a myriad of ways for brands to do so.
Just last year, KFC collaborated with popular video game CrossFire to create a Colonel Sanders character as well as inspired weapons the likes of an ice cream dagger and French fries granite to promote its special ‘CF Burger Menu’. Players were able to access these add-ons by collecting the flashcards which came with every ‘CF Burger Menu’ ordered in-store or via food delivery.
In the thousands of KFC outlets across China, customers could fire up the online game on their smartphones and compete against other players in the same outlet. KFC also organised an on-site competition in one of its outlets in Shanghai where two advanced CF players competed for the ‘Ultimate CF King’ title. This event was live-streamed on several popular platforms in China.
Download your free copy of Mintel’s ‘New Retail: The Futurenomics of Asia-Pacific’ whitepaper here.
Matthew is Mintel’s Regional Trends Director for Asia Pacific. He provides insights and analysis on the latest market developments and consumer trends across the region.