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The Chinese ecommerce giant opens the largest hydroponic plat factory to produce fresh vegetables, in partnership with Japan’s Mitsubishi Chemical.

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We’ve identified the top five trends shaping the Asian retail market and influencing retailer strategy in 2019 and beyond. Nick Miles, our head of Asia-Pacific, discusses each one and reveals what it means for suppliers in the region.

The top five trends

  1. Ultimate convenience
  2. Partnerships shaping the future of online
  3. Health and freshness at the heart
  4. Social shopping
  5. Technology transformation

1. Ultimate convenience

Changing lifestyles mean shoppers across Asia are becoming increasingly demanding. Shopping little and often is a growing trend and consumers expect to be able to source products anywhere, anytime and anyhow they like.

ReRetailers are adapting their operations in response. Convenience store chains continue to rapidly expand their networks and stores are using space in new ways. Retailers are developing smaller, more unique stores, and online delivery times are being cut.

Nick said: “Convenience is not purely about speed. Retailers that are able to meet different shopper demands through their stores, ranges, services and the experience they offer will win. These experiences will need to be fast, relevant and seamless. So, suppliers will need to ensure they also have the necessary flexibility in their businesses.”

2. Partnerships shaping the future of online

Over the past few years, major partnerships have helped share expertise and accelerate online growth across Asia. These partnerships come in many forms as retailers, suppliers and technology businesses increasingly look to blur the boundary between offline and online. In 2019, we expect to see more partnerships emerge, existing ones develop further and the influence of Asia’s largest online players to spread across the region.

Nick said: “Asia’s online landscape is incredibly fluid and competitive. Collaboration between partners will help online expand both within individual markets and across borders, faster than previously thought. Suppliers should ensure they stay on top of the latest online partnerships.”

3. Health and freshness at the heart

Asian shoppers are increasingly aware of the importance of healthy living, fresh food, nutrition and product sourcing. That’s thanks to factors like growing levels of affluence, improved education, targeted government campaigns and historical food safety scares. Retailers are responding by highlighting healthy ranges and freshness using innovative concepts, layouts and technologies.

Nick said: “Fresh food, foodservice options and health and wellness ranges will feature more prominently in-store in the future as retailers respond to changing shopping habits. Suppliers should be aware that competition for space in-store will intensify.”

4. Social shopping

Social commerce is rapidly growing in importance across Asia. Brand communication via social media platforms is commonplace, influencing shopper behaviour and giving smartphone users easy ways to shop online. Innovations will continue to emerge in 2019, as retailers and suppliers deliver targeted marketing and new ways to make online shopping more social.

Nick said: “Shopping via social media platforms is a key route to market in the region. Retailers and suppliers must therefore truly understand the landscape and have a clear social media strategy to engage shoppers and stay relevant.”

5. Technology transformation

Asian consumers are exceptionally open to new technology. In 2019 we will be keeping a close eye on digital and technological innovations in Asia. We’ll look particularly at those helping retailers to differentiate their offer and raise service levels. Those that help them develop stores set up for an online future and deliver more efficient operations in the face of rising costs.

Nick said: “Technology is revolutionising the food and grocery industry in Asia. This could have big implications for how shoppers interact with brands in store in the future. However, it’s not only about a focus on customers – it’s also about reducing costs and improving efficiency. Suppliers need to understand which technologies are set to have the biggest impact on their category.”

See these trends in action and gain access to free Asia insights.

Coupang plans to launch a 'Thai Mall' flagship store on its online platform to sell a variety of exclusive Thai products, including food, beverages, lifestyle, furniture, pet and spa products. 

Aiming at THB 200m (US$6m) in 2019

Thailand has been promoting Thai products on Coupang since August, with 899 SKUs, mostly food and beverage items. Thai Commerce Minister Sontirat Sontijirawong said the online platform will help accelerate export volumes to South Korea by 7% in 2019. The two parties agreed to expand cooperation and sell more Thai products on the platform, aiming at THB 200m (US$6m)next year.

About Coupang

Started off as a daily deals website, Coupang is now the largest online marketplace in South Korea. It aims to fulfil its customers' needs by offering a wide range of products at low prices and guaranteed next day delivery.

To find out more about Coupang's priorities, please click here.

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Online grocery retailer aims to increase private label products to 40% of sales revenue.

Extending into new categories

BigBasket, India’s leading online grocer, has announced that it will increase its private label presence. Hari Menon, co-founder and Chief Executive said, “Private labels are around 34 per cent of our business now and we plan to scale this to 40 per cent in about a year. The incremental 6 percentage points of revenue will come from non-fruits and vegetables and non-staples.

Some of the existing private label brands within its portfolio include bb Fresho, bb Royal and bb Tasties. It will launch its private label range of cosmetics and beauty products within this month. In addition, the retailer intends to introduce its private label products with its institutional customers. Hotels, restaurants and caterers will have access to a range of specially created private label items.  

The online retailer has also revealed that FMCG items, both food and non-food, account for more than half of its business. Of that, 30% comes from staples and 18% from fruits and vegetables.

 

More about BigBasket

Founded in Bangalore in December 2011, BigBasket specialises in food and grocery, including fresh produce and local delicacies. Currently in 25 cities, it has plans to expand its distribution network within India. It claims more than 10 million subscribers and daily orders of INR100,000 (US$1,410).

Find out more information the Indian market here.

 

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South Korea’s biggest ecommerce company Coupang received an additional $2bn from SoftBank’s Vision Fund to cement its online market leadership.

Rapid growth and growth drivers

This latest investment follows the initial $1bn investment that SoftBank injected into Coupang in 2015. The online retailer, founded in 2013, has seen its revenue more than doubled over the past two years and is to reach $5bn this year. With a growth rate of 70%, Coupang has since grown to become the biggest player in South Korea’s ecommerce market.

The rapid growth has been driven by investment in logistics and speedier delivery services. Coupang’s Rocket Delivery service promises delivery within 24 hours. The more recent Dawn Delivery service allows orders to be placed as late as midnight with deliveries that arrive by 7 a.m. Half of South Korea's 51 million people have downloaded its mobile app and many Coupang customers shop on its platform more than 50 times a year. 

Currently loss making but with huge potential

Coupang's growth has come at a cost. The company reported operating loss of $565m last year. The $2bn SoftBank’s investment will help Coupang maintain its business model. "The primary job of this investment is to help us become a deeper part of customers' lives," Bom Kim, Coupang's founder, said in an interview. SoftBank also commented that “We believe the company is well-positioned to lead the Korean ecommerce market, with significant platform opportunities ahead given its data, payments and logistics advantage”. 

Competition ahead

Coupang faces competition from rival upstarts like Ticket Monster and more established retailers such as Emart and Lotte, both made announcements this year to beef up their online presence.

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We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Datacentre the most reliable and robust source available for data of this type.