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Asia retailers must cater to Gen Z

News, 06 July 2015

HONG KONG: Online shopping has now become the preferred method of purchasing in certain Asian markets and retailers will need to be proactive to meet this trend, especially when catering for influential "Generation Z" consumers, a recent report has advised.

In its study, How We Like to Shop Online, global property consultancy CBRE found half of consumers in Asia-Pacific still visit physical stores, but a higher proportion go shopping online in China, India and South Korea.

Three-quarters (76%) of Chinese consumers use the internet as their most commonly used method for making purchases, the report said, while a similar pattern is happening in South Korea (73%), India (68%) and Taiwan (55%).

There are two key motivations behind this behaviour - convenience and pricing - and CBRE reported that 63% of Asian consumers identify pricing as the deciding factor for shopping online, World Property Journal reported.

The convenience of being able to compare products without having to physically visit individual stores is another important reason why consumers turn to the internet to go shopping.

The report said this trend is more prominent in emerging markets such as Vietnam (64%), China (61%) and India (58%) where quality shops are often located far from each other.

Joel Stephen, senior director and head of retailer representation at CBRE Asia, advised retailers to review their regional pricing strategy, particularly in China and South Korea, where more than two-thirds of consumers identify lower prices and better offers as the main reason to shop online.

"With 56% of Asia Pacific consumers using their desktop or laptop to check prices of products online, price transparency is an important aspect for retailers to consider," he said.

CBRE went on to highlight Generation Z consumers as an age group that retailers must accommodate because these tech-savvy consumers, aged roughly 18 to 24 years-old, will play an influential role in the regional retail market in the coming years.

"Landlords and retailers need to be more digital-savvy, keeping pace with the latest trends in smartphone applications and social media so they can build a stronger relationship with consumers, especially those from Generation Z," Stephen said.

Data sourced from CBRE, World Property Journal; additional content by Warc staff