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Thailand Retail Revolution

By on Aug 14, 2015 in Retail

The rest of the world is looking at Asia to lead growth in the coming years as the region’s consumers become increasingly affluent and their appetite for shopping grows.

“Active real estate development has driven the supply of quality and organised retail space in Asia,” said Henry Chin, head of Asia Pacific research CB Richard Ellis (CBRE). “This has translated into the ongoing entry and expansion of overseas retail brands in the region to exploit new business opportunities and offset the slowdown in their home countries.”

The major western brands are all chasing a new regional sector of shoppers. It is estimated by 2020 the region will be home to 1.74 billion middle class people. This is compared with 525 million in 2009. Asia is set to represent 66% of the global middle class population. The retail market in China alone is expected to be worth twice as much as the United States by 2020. Shopping mall developers are looking long term at the developing markets. A Nielsen report in 2012 on some of Asia’s most developed economies had some interesting statistics. South Korea had 849 modern retail stores per million population, Taiwan 514, Singapore 304, Hong Kong 295 and China 162. Less than half of the population in Sri Lanka, Vietnam, India, Thailand, Pakistan and China live in cities so there is more potential for retail growth as urbanisation grows.

Asian retailers are making up for lost time in online shopping. Now internet access has extended across the region the environment is now ripe for online shopping. For example, in Thailand, Tesco Lotus now offers 20,000 fresh food and grocery items through its online portal, ready to be delivered. In Thailand, bricks and mortar still win over e-commerce shopping.

The most successful retailers will be those that can seamlessly integrate both models.  For example, in China, Price Waterhouse Coopers has seen a big rise in online to offline retailing where retailers use websites to promote products and encourage people to visit their bricks and mortar stores.  More than 80% of Chinese consumers reported going online to research a product first before looking at the product in store and then purchasing it online for a lower price.  Online operators are learning they often need an off line presence too. To ensure stores aren’t just being used as showrooms retailers are continually challenged to look at ways to keep shoppers in their stores.

 

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