Amidst a rapidly changing economic, population and technology landscape in Asia Pacific, business leaders anticipate their current business models will need to change substantially to keep pace. While some changes such as population growth, demographic movements and changes in legislation or taxation are gradual, others are swifter and more focused such as changing consumer preferences or disruptive technologies which have the potential to create a big impact on how businesses operate. The complexity of change today means it’s becoming harder and harder for companies to anticipate and prepare.
A recent study by Nielsen found more than three quarters (76%) of business leaders expect their business model in five years will differ significantly compared to today; only 48% believe their organisation is prepared for the future; 43% are confident they have the systems and processes in place to be able to spot early indicators of change; and 59% acknowledge it will be difficult or extremely difficult to navigate their organisation forward through the next five years.
Changing consumer preferences, legislative or political changes, regulation and taxation, economic development and new competitors are among the list of change events most commonly concerning business leaders.
TECHNOLOGY WILL HAVE A SIGNIFICANT IMPACT ON THE RETAIL LANDSCAPE
The retail environment in Asia has undoubtedly evolved in the last five years and this evolution is anticipated to continue. Half of senior leaders believe retailers will have a “positive” impact on their industry and marketplace in the next five years, while online and e-commerce rank as the most significant factors influencing the changing retail environment.
E-commerce is no longer the sole domain of travel, book and music sales, with the rate of growth forecast for e-commerce in Asia Pacific signalling a fundamental step change in the way organisations will operate in the future. Half of business leaders in Asia Pacific (50%) believe e-commerce will represent 30% or more of their organisation’s growth in the next five years, and a further 32% think e-commerce will capture greater than 20% of total sales for their organisation over the next five years. In Korea, e-commerce is now the largest retail channel and in Indonesia online retail sales are growing at a pace of around 50% per annum. While still in its infancy in Southeast Asia, one thing is certain, e-commerce is set to grow exponentially and will change the retail and consumer landscape as we know it.
Having the ability to set up shop in a market is one thing, but understanding how to play in that market is totally different. The diversity of the ASEAN community represents both opportunity and challenge for business leaders. Those who get ahead of the curve and build out their knowledge of market and consumer trends will be best placed to tap into nascent demand. Conversely, companies that are unable to adapt are likely to be left behind.
For more detail and insight, download Nielsen’s Future Business Sentiment Survey whitepaper here.
Check out our infographic and video on the same topic here.
Watch the replay of our live webinar on Thursday, 9 June 2016 here.