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Insights

The big retail picture in Asia Pacific

By Laura McCullough, CPG Leader, Growth and Emerging markets
FMCG and Retail | 04-07-2016
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Strong retail growth was a challenge to find across Asia Pacific in 2015, but pockets of success and opportunity can be found in specific markets, channels and categories.

A contributor to the challenges in 2015 was consumers’ cautiousness to spend. With more people migrating to urban centres, and average household sizes declining, consumers face increased living costs. However, consumers are prepared to pay for convenience to support their ‘on the go’ lifestyles which provides fresh opportunities for retailers and manufacturers.

One such opportunity exists for smaller format stores which will benefit from the increased number of shopping trips as consumers slightly reduce their basket size but increase the frequency of visits. Another opportunity lies in tapping into consumers’ growing expectations – be it product quality, service delivery or value for money. As their purchasing power grows, consumers are demanding more and are prepared to spend if their evolving needs can be met. This offers plenty of opportunities to continue fuelling the fastest growing segment in Southeast Asia – Premium.

The concept of ‘value’ has never been more prevalent, with increased levels of promotional activity across the region. While reflective of traditional brick and mortar stores, it is e-commerce that boasts the highest levels of promotional activity. With over 8 in 10 Asia Pacific online consumers agreeing that shopping online is convenient and half of those (41%) planning to buy groceries online in the next six months, e-commerce for FMCG has become a necessity for Asian retailers.

The needs and demands of consumers in Asia are diverse and constantly changing. Consumers have never before been as informed, empowered and ready to embrace brands and retailers that understand their lifestyle requirements and needs, be that physical or online. Companies must ensure their brands deliver on their value proposition and play an active role in consumers’ daily lives if they are to succeed.

Insights contained in this article are extracted from the 2016 quarter 1 edition of Nielsen Quarter by Numbers, where a total retail picture in Asia Pacific is presented. Every three months, Quarter by Numbers will scan the markets that matter to organisations doing business in Asia Pacific, report on the latest consumer insights, and dive into FMCG landscapes to help senior business leaders think fast and win big in this region..

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