Retail environment plays unique role in Asia

23 July 2010

SINGAPORE: Brands hoping to make an impact in Asia must view the in-store environment as a key media channel fulfilling many of the roles played by online in the US and Europe.

Grey and G2, part of WPP Group, surveyed 2,100 adults in Australia, China, India, Indonesia, Japan, Korea, Malaysia and Vietnam to gain an insight into the "purchase decision journey."

Overall, 52% of respondents typically knew the specific product they wanted to buy before entering a supermarket, rising to 55% for drugstores and 63% for "mom and pop" shops.

More than a third of contributors in each nation were generally considering a number of alternatives, and only made their final choice when assessing the options available on the shelf.

Within this, 84% of Indians had a particular product in mind prior to setting out on a shopping trip.

This proportion fell to 73% in Indonesia and 60% in Malaysia.

Totals declined to 44% in Vietnam, 40% in Australia, 38% in Korea and just 34% in China and Japan.

One major characteristic observable in Asia is the substantial amount of time customers spend in stores, coming in at an average of 37 minutes.

Figures rose to 52 minutes for supermarkets, where individual visits lasted 83 minutes in Indonesia, 65 minutes in China and Korea and 64 minutes in Malaysia.

Bindu Sethi, Grey Asia Pacific's chief strategy planning officer, argued this is because shoppers are comparing prices, learning about brands and asking for guidance from staff.

"For emerging markets in Asia, the store is not a store. It is a school. It is a place to get educated about world food, world medicine and new products that may be coming up," she said.

"Look at the store as a media channel, because that's where the consumer looks for information ... In Asia, the store is like the digital space in the Western world."

For example, 56% of people seek out demonstrations or advice on potential purchases in supermarkets, climbing to 62% in pharmacies, scores that were both higher than the norm in developing economies.

Some 72% of participants liked identifying new or different products when browsing for snacks, drinks and similar items, a habit that was again more pronounced in countries with less experience of brands.

Elsewhere, 70% of consumers searched for in-store information to help them make purchases, with over 80% of emerging market customers adopting this approach in supermarkets, drugstores and provision shops.

However, while 77% of the panel were open to receiving advice – with health and beauty among the areas where it was especially appreciated – reassurance was favoured to sales pitches.

"When there was little choice available, retailers were always persuading consumers to buy more brands," said Sethi. "Today, more empowered consumers prefer to pick the products they want."

Promotions also had a limited appeal, as 62% of respondents tended not to select goods being sold on offer, with 40% of those that did stating they would have bought the item concerned at full price.

Nearly 60% of adults in developing nations avoided promotions as they like to "buy the same brands and products all the time," and a significant minority said discounts led to doubts about quality.

Further insights for the Eye on Asia Study, including a segmentation of the target audience in Asia, can be found in a post on the Warc Blog, written by Steve Yi, chief strategy officer of Grey Group Korea.

Data sourced from Grey Group/G2; additional content by Warc staff