Omni-channel a key strategy in Asia-Pacific

Euromonitor International sums up key findings from this year’s Retail Asia-Pacific Top 500 rankings and provides an overview of the retail scene in 14 Asia-Pacific economies in 2014.

Highlights from this year’s ranking
The Top 500 retailers in the Asia-Pacific region registered sales totalling US$1,050 billion in 2014, up by just over 2% from the previous year.

China and South Korea were the largest contributors, with Lotte and China Resources leading the charge. On the other hand, Australia and Japan were hardest hit, where declines were largely contributed by Woolworths and Yamada Denki.

The biggest decline in sales was contributed by Australia, which is suffering from a sharp decline in consumer confidence as households feared the impact of the new budget on family finances. China continued to garner the most number of entries in the Retail Asia-Pacific Top 500 rankings — confirming that its growth trajectory for its very top retailers is still very much in play despite stronger economic headwinds at an overall market level.

Hypermarkets demonstrate resilience
The hypermarket channel demonstrated a high level of resilience in Asia. This channel was led mainly by China and South Korea, recording 8% growth compared to 2013 and US$6.36 billion in added sales value in 2014.

Sun Art Retail Group, Yonghui SuperStores and Shinsegae added more than half this value within this channel and provides a clear indication that while there was strong growth in the channel, China and South Korea have been the primary drivers.

Omni-channel a key strategy
While Internet retailing still remains a key channel witnessing strong growth of almost 30% in 2014, the concept of the omni-channel, a retailing concept that refers to the cross-use of multiple retailing channels to exploit synergy benefits, gained increasing significance in many Asia-Pacific markets.

The Top 500 retail players continue to implement strategies to focus on integration of their multiple retail channels — brick-and-mortar stores and online retailing in many cases. In Japan, market leaders in the Top 500, described as “bricks-and-clicks”, have increased their presence in a wide range of channels, including grocery, apparel, appliances and electronics, to name a few.

Among many different approaches to omni-channel, leading players such as Seven & I Holdings and Ryohin Keikaku are also employing innovative technologies to create a more convenient and extensive retail space, seamlessly integrating online and offline channels together.

In India, mobile Internet retailing is expected to be the next big channel for retailing over the forecast period. During 2014, a number of Internet retailers announced they would close their desktop platforms, and operate purely through mobile apps (applications). This is likely to continue over the forecast period, with many retailers switching to the mobile platform.