Asia 2020: 5 Things to Watch Out for in the Consumer Sector
Consumer is going to be an interesting space to watch in 2020 as companies undertake rapid tech innovation for a piece of the buyer's wallets
Asia is the biggest e-commerce geography in the world, and, to a large extent, has even set the tone for the online commerce industry globally. Giants like Alibaba and JD.com have led the way in re-defining the consumer and wholesale retail channels, and analysts agree that, today, the most innovation in e-commerce and logistics comes from Asia.
In 2020, retail sales growth in terms of volume is expected to slow globally, including Asia, because of subdued demand in China, a new report from The Economist Intelligence Unit showed. On a U.S. dollar basis though, growth is expected to accelerate, with Asia accounting for nearly 45 per cent of the total.
By 2040, Asia alone is expected to drive 40 per cent of the world's consumption, and lead the rest of the world in global flows of trade, capital, talent, and innovation, according to a study by the McKinsey Global Institute.
"The question is no longer how quickly Asia will rise; it is how Asia will lead," the report says.
Entrepreneur Asia Pacific looks at 5 trends in the Asia consumer space that could define 2020.
Boutique E-shopping Websites Will See Traction
Thanks to the behemothic logistics industry, which was a direct result of the e-commerce boom, anyone can go online and sell whatever they want to. The penetration and level of access Asians have to the internet has given rise to boutique online shops that sell across channels, but specialise in one type of product, such as organic cosmetics, sustainable or recycled footwear, organic clothing, etc.
While e-commerce websites attract customers by offering deep discounts on everyday items, the rise in median household income and disposable income in Asia has allowed these boutique online stores to capture buyers who don’t mind paying a little more for high quality products.
Big Ticket Items Could Start to See More Sales Online
On average, Asian shoppers check out items worth between $5 to $15 when making purchases online. These mostly include groceries and other household items. But most shoppers still prefer buying costly items in-store.
“Higher valued items are still very much being purchased in-store, but we're seeing increased payments and logistics systems improve trust in purchases of larger ticket items in Asia,” says Hao Tran, CEO of Vietcetera Media, a Vietnamese media company.
Blockchain Could Help Build Trust
“Traceability of consumer goods on blockchain will increase, as counterfeit and low-quality products are a larger problem in several Asian countries compared to North America of Europe, not only for domestic goods but also for exported consumer products,” says Christian Oertel, global marketing manager at Conflux in Singapore.
“Reliable and trustworthy information about the quality and authenticity of the products they buy is becoming more important for the global consumer. Not only for normal consumer goods, but also for medicine. Transparent and reliable information is critical to the health of the people,” Oertel added.
AI Will Help Shoppers Buy Items Offline
With the online and the offline world increasingly merging, artificial intelligence at brick-and-mortar outlets are expected to increase in numbers, helping shoppers buy exactly what they need, and suggesting things they might need in the future depending on their consumption patterns and online ordering history, especially for everyday items.
Fashion Consumption Will Change
2020 is expected to be a generally tough year for the global fashion industry, with growth slowing to 2 per cent to 3 per cent, according to McKinsey. But even as it slows, sustainability is something that the Asian, and broader global fashion industry would have to keep in mind in 2020 as focus on climate change becomes sharper, and consumers become more conscious of what they wear.
A rise in startups that optimize sustainable farming, to companies developing recycled plastic fabrics will likely be a center of focus.