Ahead of Retail Congress Asia Pacific, to be held in Singapore on 17-18th March, four members of the speaking line-up shared their thoughts on three of the big questions facing Asia's retailers.
1. How would you define the current momentum of the retail sector in Asia?
Jonathan Yabut | Chief of Staff | AirAsia
"I see it to be robust and progressive heading towards the digital and mobile space. Companies will take advantage of lower retail cost via ecommerce and will find creative ways to overcome challenges in online payment schemes (i.e. lack of credit card or paypal penetration) which I personally believe is a key barrier to realizing a mature online market.
"Meanwhile, this doesn't mean that physical retail will soon slow down. Real estate in Southeast Asia and India is booming. With this comes the explosion of a "mall mania" culture supported by the growing middle class."
Nissan Joseph | Managing Director | Crocs India
"Overall growth continues to be the key story. All emerging economies have their ups and downs but overall momentum continues to be strong. Some companies were too aggressive in their plans and may not be hitting the numbers but overall momentum is steady."
Sunil Chainani | Board Member | FabIndia
"A huge opportunity as it will become the fastest growing and probably the biggest consumer market in the world - however while retailers may succeed in gaining sales/market share, they may struggle to maintain profitability as many new age companies with huge PE funding are disrupting the market by offering a range of services/discounts which others cannot afford."
Ben Flintoff | National Operations Manager | Palm Oasis Ventures for Baskin-Robbins Australia
"Having enjoyed a period of sustained growth we are now embracing the challenge of the streamlining and systemising of processes that may have not met our best practice standards during the growth phase to ensure profitability is maintained."
2. Where are the growth areas for your company?
Jonathan Yabut | Chief of Staff | AirAsia
"Ancillary business is the "future" of airline industry for expanding growth. This refers to anything that can be sold to passengers apart from their airfare: food, souvenir items, gadgets, value-added services like wifi onboard and priority seating, duty free items, holiday packages, etc. Airplane seats are fixed inventories but retail products are not. This is where the opportunity lies.
"Airline companies these days think of their passengers as any set of captured consumers who just happen to be 37,000 feet up in the air and are willing to spend on anything given the right product and price."
Nissan Joseph | Managing Director | Crocs India
"Product line expansions are key as consumers expect brands to create and innovate much more frequently than before. Penetration into Tier II markets and Frontier Economies offer potential for continued growth."
Sunil Chainani | Board Member | FabIndia
"Reaching out to the growing middle class and younger segment in India, international growth, finding ways from the best of products/services we offer across the world to reach other growth markets."
Ben Flintoff | National Operations Manager | Palm Oasis Ventures for Baskin-Robbins Australia
"Food - as our population and knowledge grows, coupled with our demand for convenience, this sector will continue to expand. Luxury items (edible and non-edible) will continue to expand, however the challenge in this space will be for true luxury or desirability to be displayed. The Ferrari's and Chanel's of the world will continue to set the bar of aspiration."
3. What challenges and issues keep you awake at night?
Jonathan Yabut | Chief of Staff | AirAsia
"We want to excel in omnichannel marketing and selling. We're still getting there. OTA channels are always favourable to our costs but brick and mortar stores are also important to capture the traditional customers. A company like AirAsia is also affiliated with so many sister companies and we would be very pleased if we are able to think of creative and convenient ways to cross-sell seamlessly.
"Lastly, as mentioned above, we need better technologies and closer intra-industry collaboration on how to enable the masses to pay items online. There have been creative examples I've seen so far: in the Philippines and Indonesia, consumers who frequent deal discount sites but don't have credit cards can reserve their items online and pay them in cash via 7-11. The banking industry also needs to step up in enabling low income population to access alternative online payment facilities."
Nissan Joseph | Managing Director | Crocs India
"The on-going shift of production between Asian countries can be disruptive to a supply chain process that can create challenges at the front end. Price hikes at factory level that have to be managed when passing through to a customer can be taxing since a lot of them tend to be sudden and not always planned for."
Sunil Chainani | Board Member | FabIndia
"The competition from some companies that in the interest of top line growth are willing to offer products and services at or below cost - these companies are only sustained by Investor money and are not concerned about P&L in the near term."
Ben Flintoff | National Operations Manager | Palm Oasis Ventures for Baskin-Robbins Australia
"Hyper-competition in commodity items where proper planning allows seeking simply price is a real risk. (Being able to purchase items from around the world is not new, the speed with which these items are being delivered is turning them in to commodities). This means the brand and what it means to the guest/consumer/purchaser remains critical for maintaining front of mind position for our markets. Luxury and higher end brands have their own hyper-competition around experience, where companies continue to raise the bar in the in-store relationship they are developing with consumers."
