World Retail Voice Blog Post
Reflecting on opportunities and challenges facing retailing and the retailers in Asia
Guest blog post by Nitin Sanghavi, Professor of Retail Marketing and Strategy, Manchester Business School
As we all get ready to join in and listen to exciting speakers at the Retail Asia Congress between 17-18 March in Singapore, perhaps this is the right time to reflect on opportunities and challenges facing retailing and the retailers in Asia now and up to 2020.
It is clear that , barring any natural and/or man-made disaster, the consumption throughout Asia will continue to grow due to increase in income, increasing urbanisation, trickling down of income growth to lower middle and ‘upper bottom’ of the pyramid, especially in semi-rural and rural areas. We will also see rise in number of nuclear households throughout Asia leading to higher consumption per capita. Millennials and Generation I, using multi-channel, will mainly drive this growth underpinned by attitudinal shift (There is only one life- enjoy it and live it). However, the growth will not be uniform. It will be different between and within countries, between and within consumer segments and product categories. Retailers will really have to understand this and get this right.
Key medium term (2/3 years) issues facing retailers in Asia will be around (1) customer understanding/connect/engagement/providing LTV and developing LTL (2) developing profitable/sustainable multi-channel business (3) creating/sustaining profitable growth (4) getting right balance between supply side efficiencies and demand side effectiveness (5) having right talent/capabilities within the business and the leadership team to deliver the goals.
In long term (4/5 years), most of the retailers will need to undertake fundamental revision of the current business model. In order to do this, they will have to not only take the present forward but also take the future backwards and decide what to keep and what to change. They will have to answer questions such as what are we famous for and what should we be famous for.
I look forward very much to meeting you and interacting with you all in Singapore soon on these and other issues.
Nitin Sanghavi will be speaking in the following session: Leadership challenges and the agenda for retailers from South East Asia in "New Normal" at Retail Congress Asia Pacific in March.