APAC retailers face pressure to adapt to tech, consumer shifts

AI advancements, data analytics, and omnichannel strategies are reshaping the future of retail in the region.

Technological innovations, changing consumer preferences, and the demand for seamless shopping experiences are challenging retailers across Asia to rethink traditional strategies.

At the Retail Asia Summit 2024, held at the Grand Copthorne Waterfront Hotel in Singapore on 20 November, industry leaders gathered to discuss how advancements in AI, data analytics, and omnichannel strategies are reshaping the future of retail in the region.

Kanaiya Parekh, a partner at Bain & Company, set the stage by discussing the current state of the APAC retail market, pointing out that whilst the region has experienced a period of turbulence and recovery during the pre- and post-COVID era, growth is now slowing.

With rising capital costs and extended investment returns, Parekh emphasised the critical role of technology, data, and AI for companies to remain competitive.

"By aggregating data, it gives you the ability to look into opportunities. But with prescriptive and generative AI, it gives you the ability to interpret that information," he said.

Shifting focus to the health and beauty retail sector, Andrew Wong, CEO of Health & Beauty at DFI Retail Group, addressed the growing consumer demand for holistic wellness.

“The demand for holistic wellness is beyond just traditional healthcare—it’s moving into preventative measures, where consumers want products that improve overall well-being,” he said.

Industry leaders Frankie Shadbolt, regional sales lead at SEA H&M, Abigail Beja, head of retail at Shilla Travel Retail, Alessandro Tomio, senior director of South APAC Markets & APAC Wholesale at Lacoste, Tim and Julian (ServiceBurro), also discussed the evolving role of physical retail in an increasingly digital world.

Expanding on the theme of technology integration, Antoine Cadoux, managing director at PwC Southeast Asia Consulting, cited the growing importance of omnichannel strategies in retail.

Additionally, Trixie Chua, performance marketing strategy lead at TikTok Global Business Marketing in APAC, explored the rise of e-commerce, particularly on platforms like TikTok, where brands are seeing success by focusing on high-performing SKUs.

Reedev Taneja, director for Analytics & MarTech in APAC at eClerx, also highlighted that consistent branding and production information in all channels will help brands achieve customer acquisition, conversion rate and sales revenue.

"Four out of five customers will buy the product by researching online hence brands must make sure that they give the right information to the consumers at the right stage in the purchasing journey," he said.

The second panel, featuring Andy McKimmie, global head of E-Commerce at Blackmores Group, Vidmay Naini, general manager of Global Emerging Markets at eBay, Sachin Somaiya, business development director of Profiles Division at Kantar, and U-Fong Chua, e-commerce director of  MU ASEAN at Beiersdorf, discussed how companies in Southeast Asia are leveraging data and technology to meet diverse consumer needs and deliver personalised experiences.

Meanwhile, Julien Bourdiniere, senior partner at Roland Berger, highlighted the significant growth opportunities in China and India, emphasising key consumer trends such as price sensitivity, health-consciousness, sustainability, and the growing preference for local brands.

He also highlighted the challenges multinational brands face as they adapt to these shifting trends, particularly with the rise of agile, competitive local players.

Adding to the regional perspective, Izlynn Chan, CEO at BHG Retail REIT, shared insights on the retail market in China, focusing on the challenges of managing a diverse portfolio that includes everything from suburban malls to luxury stores.

Moreover, Gursimran Singh, director of Strategy & Communications Planning at PHD, discussed the power of influencers in marketing, particularly in Southeast Asia.

"In a single video, an influencer has the power to drive impact across the entire marketing funnel, from awareness to conversion," he pointed out.

Dipashree Das, senior marketing leader in APAC & ANZ for Entertainment & Consumer Tech, further explored the role of social commerce. Drawing from his experiences at Amazon and Netflix, Das outlined a framework for success in this space, based on the 3 C’s—Content, Customer Experience (CX), and Community.

The third session, which featured leaders Tan Chun Yan, head of Singapore and Global Retail Excellence at Love, Bonito, Guray Ozturk, head of BFSI and Digital of APAC- Infobip, Izlynn Chan, CEO at BHG Retail REIT, and Deepak Subramanian, Executive Vice-President, Unilever, focused on leveraging omnichannel strategies to meet consumer demands and overcome challenges in the retail space.

Guillaume Sachet, a partner at KPMG in Singapore, also revealed how Gen Z consumers are reshaping the retail industry, emphasising how this ‘digitally-savvy’, ‘socially aware’ group prioritise personalised experiences that align with their values.

"We have 300 million Gen Z consumers emerging in China, with a similar number in Southeast Asia and South Asia," he said.

Brick-and-mortar businesses also continue to play a resilient role in the retail ecosystem, according to Shaakir Siraj, managing director at Mydin Mart. Whilst digital channels are growing, he argued that physical stores still provide essential sensory experiences and personal connections that online shopping cannot replicate.

Siddharth Pathak, senior partner and head of Consumer Industries and Retail at Kearney, also discussed the gap between digital potential and actual adoption in APAC retail.

Whilst there is significant potential for digital transformation, he said that implementation remains limited due to factors such as budget cuts, siloed strategies, and poor alignment with business goals. "When you go to physical stores across Southeast Asia and Asia Pacific, you start noticing that the adoption is much, much lesser than what the potential is.”

Winnie Ong, partner at Simon-Kucher, also spoke about how technology, especially AI, is reshaping retail strategy. However, she cautioned that whilst AI is a powerful tool, it should not replace human decision-making.

"AI is not a strategy. AI also doesn't tell you what your strategy needs to be. We still need it [AI] to enable our strategy, but it cannot fully replace what we do,” Ong noted.

Finally, Christopher Ang, CEO at GS1 Singapore Limited, cited its role in standardising global trade practices, the rise of seamless commerce driven by Gen Z, and the shift towards digital tools, sustainability, and the adoption of 2D barcodes for enhanced transparency and efficiency in retail.