By 2025, ASEAN’s internet economy is expected to be worth US$300 billion. E-commerce has undoubtedly disrupted the retail landscape both for the consumer and the retailer. Along with the age of digitalisation comes the ease of access to information, goods and services, which gives end-consumers more power than ever to choose.
As ASEAN’s internet economy burgeons, It is now easier than ever for businesses in customer-facing industries like retail and services to gain access to potential customers. In recent years, many direct-to-consumer (D2C) brands have emerged in the competition for a slice of the retail industry.
We will be releasing our report on The Future Retail Ecosystem analysing the trends and opportunities in the retail value chain as a result of digital adoption, and as part of our study, we hosted a focus group featuring stakeholders across retail, f&b, grocery, and retail enablers last week. Highlights of some insights shared during the discussion featured 3 key aspects of the retail ecosystem were covered during the discussion - Logistics and Fulfilment, Digital Solutions for Specific Business Needs, and Importance of Partnerships for the Ecosystem.
Logistics & Fulfilment
The retail journey differs across sectors - from food and beverage (F&B) to groceries, lifestyle products and so on. Each of these sectors require different tools and solutions to support fulfilment and logistics across different touchpoints on the omnichannel customer journey.
Syed Ali Ridha, Head, Digital Supply Chain, Entrepreneurial Commerce, AEON Malaysia, shared how the sheer number of malls under AEON across Malaysia plays a key role in allowing for hyperlocalisation of grocery fulfilment, which may be further extended to general merchandise. As the population becomes increasingly digital-savvy, traditional retail players like AEON will be able to attract new groups of consumers.
Similarly, Sandeep Gulati, Vice President, NTUC Enterprise Cooperative, highlighted how the foundation of e-commerce is logistics, and supply chain management is key. During the pandemic, stores were adapted to become dark stores which served as fulfilment centers for e-commerce channels.
In both cases, the omnichannel strategy ultimately relies on efficient logistics and last-mile delivery to get purchases to their customers as efficiently as possible. However, across the ASEAN region, the question of cost and time remains. More importantly, the logistics of omnichannel strategies will be a key area of growth and partnership in the region. This involves many tests, trials and integration of real-time data to ensure that logistics and fulfillment operates optimally.
Digital Solutions for Specific Business Needs
Digital solutions need to be adapted for specific business uses. Depending on the business’s needs, the role of digital and IT teams in the company should aim to advise business functions on the appropriate digital tools to adopt, according to Budi Tedjaprawira, Head of IT Division, MAP Boga Adiperkasa (MBA). For MBA, digitalisation concerns the survival of the F&B industry during the pandemic. As the uptake of food delivery services increase in the region - real-time integration of back and front-end systems will play a key role in delivering for the customer.
The general consensus was that digital tools should be adopted to support the core business. Sharing from the data analytics perspective, Sandeep highlights 3 key components in People, Process and Technology which comes into play.
IT and digital tools serve as enablers of the omnichannel and direct-to-consumer strategy.
At Luxasia, their pivot to omnichannel 5 years ago has now allowed them to set up an ecommerce enabler for beauty brands to go online and reach a wider customer base. Satyaki Banerjee, COO, Luxasia, also shared how the order management system (OMS) connects multiple customer touchpoints and enables access to data for actionable insights.
Importance of Partnerships for the Ecosystem
Players along the retail value chain are also increasingly exploring ways to reach the end-consumer directly, with many expanding their vertical capabilities. Considering partnerships in technology and service capabilities will allow for retailers to focus on their core business and value proposition to their end customers, and create a retail ecosystem catered to the new consumer.
As Ali says, “the space is big enough” - the retail ecosystem today is all about partnerships and collaboration across services, industries, and technology.
This AIBP Focus group is part of a study into ASEAN’s retail ecosystem amidst accelerated digital adoption both on the enterprise side, as well as the consumer side. Stay tuned as we explore deeper insights and highlight key areas of opportunities for retailers in ASEAN in our upcoming report on The Future Retail Ecosystem! Feel free to reach out for more information on the study.