For large retailers with long-established sales channels, COVID-19 has led to a period of extreme upheaval. The volatile economic environment of 2020 has caused many business models to become unprofitable or even redundant. As a result, we’ve seen some of Southeast Asia’s (SEA) largest and best known bricks-and-mortar retailers forced to close shop.
Most notably, heritage department store chain, Robinsons, closed its doors recently in both Singapore and Malaysia after over 160 years of operations.
Despite the challenges that retail players have faced this year, rather than sounding the death knell, the pandemic has accelerated its digital transformation, already so many years in the making.
New businesses and business models have been spun up to meet the demands of the post-Covid environment, whilst established businesses pivoted quickly and reinvented themselves, finding new revenue streams and new markets, as a result.
The internet economy has been a lever for resilience, opening up new channels and opportunities for enterprises and small businesses to adapt. The bold companies that are moving fast and reinventing themselves with a global outlook are emerging as market leaders of the new normal and engines of economic recovery.
Leaning on technology to move quickly
On the eve of lockdowns across the region, many businesses scrambled to bolster their online channels and logistics capabilities to ensure minimal impact to business operations. Stripe has worked with a diverse range of businesses to help them reinvent their business models online.
Household names like Isetan department store in Singapore and Jaya Grocer in Malaysia that have long been bricks-and-mortar only were able to respond to surges in demand and re-orient towards online services when it mattered most.
The creation of new online sales channels, coupled with months-long restrictions on movement, shifted consumer habits as well. Over the past year, the value of ecommerce in SEA increased by 63 per cent, with over a third of 2020’s online commerce generated by new shoppers.
For the businesses that invested in moving online, the dividends are likely to keep paying off. According to the same research, four fifths of shoppers who shifted online in the past year intend to continue buying online — even as COVID restrictions ease up in many SEA countries.
Reimagining a new model of shopping
While Robinsons was closing its doors for good this year, sporting goods chain, Decathlon, was opening its fifth experience store in Singapore, on 3,000 square feet of prime real estate on Singapore’s Orchard Road.
Retailers have generally responded to the economic pressures of the pandemic by giving up their expensive leases and focusing instead on building out their online strategy. However, shopping mall culture remains resilient in Southeast Asia and many businesses have actually invested in creating or expanding their physical presence, spinning up new models for offline shopping.
Although SEA shoppers still prefer to see, touch and try before they buy, over the last months, they’ve become accustomed to the ease and speed of buying online and expect the same when making purchases offline. While businesses recognise the importance of meaningful offline experiences to keep customers engaged, they’re also investing in integrating seamlessly with their online platform and offering contactless services where possible.
To read the rest of the article, please use this link: https://www.businesstimes.com.sg/asean-business/reinventing-southeast-asia%E2%80%99s-retail-industry-to-drive-economic-recovery-0
13 January 2021