Latest / The Retail Podcast / APAC Retail: The $32B AI Agent Boom & TikTok Shop Trends

Transcript

APAC Retail: The $32B AI Agent Boom & TikTok Shop Trends · The Retail Podcast

• 0:00
  Hello, I'm Reef Quail, Managing Director of NRF AIPAC, and this
• 0:03
  is Five things Friday AIPAC Edition.
• 0:18
  Hello. Hello everyone.
• 0:21
  Hello everyone. Lovely to see you all.
• 0:25
  It's a special time of the year. We're just a week away from
• 0:28
  Christmas and the New Year's, but we want to be respectful and
• 0:32
  dive straight in. So you and why don't you kick us
• 0:36
  off? OK.
• 0:37
  And that depends on what picture you're going to pull out first,
• 0:39
  and then I'm going to start my story that way.
• 0:42
  I've got to start with this one. Yeah, just unbelievable.
• 0:45
  Yes, as we wrap the years with all kinds of data and also all
• 0:51
  kinds of insights, we have the infamous Shopify.
• 0:55
  No, there's no shopping, right, This is.
• 0:56
  Spotify. Qualified.
• 0:59
  Oh my God, I'm like, so commerce Spotify rap, right?
• 1:02
  Is this yours, Ewan? I know it's embarrassing.
• 1:05
  Well, no, I'm proud of. No, no, I've had a whole new,
• 1:09
  I've had a whole new insight on your character.
• 1:11
  Please continue. So actually, I just wanted to
• 1:14
  say that Spotify having launched their rap every single year and
• 1:18
  how it has actually created traction so much, I think
• 1:22
  retailers should be smarter to use how Spotify rap is and how
• 1:27
  collaborating with them can actually leverage conversations,
• 1:33
  talk about from trend jacking to tying in the different kind of
• 1:37
  culture. So that conversation actually is
• 1:39
  quite important and we're not hearing enough.
• 1:42
  So this is really be a really good example and we can't, to be
• 1:46
  honest, I can't stress on how more important shareability
• 1:50
  really is. And this is me.
• 1:52
  I'm 85 years old, as you can tell from my listening habits.
• 1:57
  So we want is. That what you you had 85.
• 2:02
  I know, but you know, I'm a really special person.
• 2:05
  So there is this really interesting a company where they
• 2:08
  talk about when you purchase something, we will actually wrap
• 2:12
  your products, give it like that gift wrapping with Spotify's,
• 2:17
  your Spotify's, you know, inside.
• 2:21
  And I think that's amazing. So you could print your own
• 2:23
  Spotify raps like literal, like literal.
• 2:27
  And then you could, you could share and give it away.
• 2:29
  And it's not just online share now it's actually gone into
• 2:33
  offline sharing. So I think this is certain ideas
• 2:36
  that I, I really do think that retailers aren't aren't really
• 2:40
  leveraging enough so that we have.
• 2:43
  Oh no, I love it. I love it.
• 2:44
  My, my, What's your listening adrieve?
• 2:46
  19. I got 19, mine was 55 zero.
• 2:53
  Alexis, there's 19. How is that possible?
• 2:57
  Maybe he's listening to. Stuff like that.
• 2:58
  That's because his his children have hijacked his Spotify and
• 3:02
  he's lost. He's lost control.
• 3:04
  Yeah, no. Yeah, OK.
• 3:08
  That I can accept. OK.
• 3:09
  All right. So moving on to you, Sir Reef.
• 3:11
  Right. So this week I'm going to talk a
• 3:14
  little bit about a couple of phenomena.
• 3:16
  The first one I'm going to talk about is AI shopping agents in
• 3:19
  Asia Pacific. So AI everyone's got, everyone's
• 3:22
  sort of grappling with the content of our shopping agencies
• 3:24
  and they're not that's, you know, they're not that foreign
• 3:27
  to us. We're probably using them every
• 3:28
  day. And in fact, it's estimated that
• 3:31
  something like $32 billion worth of by 2028 will come via AI
• 3:36
  agents shopping on behalf of consumers in APEC.
• 3:40
  But in 2028, what we're seeing here is a situation where
• 3:43
  there's lots of them. The use cases now, they seem
• 3:47
  really simple and mundane, but we are actually using them every
• 3:49
  day. So things like the use cases I
• 3:52
  would identify things like personalised product discovery
• 3:54
  and recommendations like I find sneak at under $120.00 that look
• 3:58
  good with office casual wear or something like that, you know,
• 4:01
  or, or things like conventional Q&A.
• 4:04
  So you're actually making it conversational.
• 4:06
  So I'm looking at this fishing rod and then say is it good to
• 4:10
  fish in freshwater or saltwater? I don't know.
• 4:12
  There you go, there's another one or autonomous.
• 4:15
  So people are thinking about how autonomous agents are working in
• 4:18
  their home. So you've run out of milk and
• 4:21
  your fridge orders you the new milk.
• 4:24
  So they're working on your, these agents are working when
• 4:27
  you need replenishment of your food, for example, price
• 4:31
  monitoring and deal optimization.
• 4:32
  Good one is I'll buy that laptop if the price drops under when
• 4:36
  you, when a deal pops up that laptop's under $900, just buy
• 4:39
  it. So the agents are operating on
• 4:42
  behalf of the consumer. And then there's complete end to
• 4:44
  end, so full of Genting ecommerce where it's booking
• 4:47
  travel, accommodation, add-ons in one flow.
• 4:50
  Or it's, you know, you, you go, you give it a brief.
• 4:52
  I'm gonna buy a gift for Alec. And he, he's this fella and
• 4:55
  he's, these are his interests and the whole, the agent goes
• 4:58
  out and buys the gifts and takes it to you.
• 4:59
  And then you can say I don't like the gift and I'll manage
• 5:02
  all the return and exchanges and all the refunds autonomously
• 5:06
  without any human interview. So these things are real.
• 5:08
  Now in the Asia Pacific region, these are classic use cases.
• 5:11
  You know, the bigger, and I'll probably touch on the big agents
• 5:13
  in the, and out in the region. We're seeing probably the the
• 5:16
  major AI shopping agents assistants in the regions.
• 5:19
  Obviously China, you can't start, you can't it stop starts
• 5:22
  and stops with China. So Alibaba and Taibo the the the
• 5:26
  generative AI shopping within Alibaba.
• 5:28
  It's a Taibo e-commerce platform is is pretty amazing to discover
• 5:31
  new products. Shopping is is basically
• 5:33
  delivering their integrations with it gives you obviously
• 5:36
  personalised suggestions and recommendations through the AI
• 5:39
  tool through the agent Michelle in India, it's all chat and
• 5:43
  voice AI agent so you can talk to it and actually start to
• 5:46
  optimise your what you're looking for and then Visa that
• 5:49
  as in the credit card is a really a launched intelligent
• 5:52
  commerce extended extended to Asia Pacific.
• 5:54
  So and so there are credit cards so you're not seeing obviously
• 5:57
  right across the region, but you're seeing it happen in
• 6:00
  pockets where credit cards are used.
• 6:02
  So there's some really good examples but where agent people
• 6:05
  are using agents all the time and they're even building it.
• 6:08
  I mean you can if you're if you're really dab hand at
• 6:10
  ChatGPT or one of the other platforms, you can build your
• 6:13
  own agent and do it from scratch yourself within the platform.
• 6:15
  So you know by by 2020 eight $32 billion you US in APAC region
• 6:21
  fire agents, it's not insignificant talking about a
• 6:24
  lot of agents that are operating completely outside.
• 6:27
  One of the things I would say too is it because the region is
• 6:29
  very mobile LED you it starts and starts and Oval that.
• 6:34
  So the natural, the natural use of agents through mobile digital
• 6:36
  devices is accelerating really, really quickly and it probably
• 6:39
  accelerates faster in mobile LED markets than it does ingest DOT.
• 6:42
  Market, OK, perfect. Thank you.
• 6:44
  Ewan coming back to you. Yeah.
• 6:46
  So having said that, I always wonder when it comes to agentic
• 6:49
  commerce right now what Reef has just described very quickly, it
• 6:52
  was just really talking about what it does on a personal level
• 6:56
  for each of the customer. But the question needs to also
• 7:00
  be, are retailers ready to also lead the space and also take
• 7:05
  this conversation from their point of view and their and to
• 7:08
  serve the customers? So yeah, I'm working on a really
• 7:11
  special project and I can't wait to share that next year, but
• 7:14
  that's coming soon. But right now, I also want to
• 7:18
  add on to Reef's list. And this is about TikTok shop.
• 7:23
  So I know, I think this whole year I have been on TikTok quite
• 7:27
  a fabric, but really the real growth here is not in my
• 7:31
  posting, but the real growth here is really about TikTok
• 7:36
  shop. And it is now beyond beauty,
• 7:39
  beyond fashion, beyond flash deals.
• 7:42
  It is now moving into serious social commerce platform.
• 7:47
  So I think a lot more brands being a lot more serious,
• 7:50
  they're now using content like recipes, the integrated recipe,
• 7:55
  the kind of, you know, value added content on TikTok to just
• 7:59
  talk about products. So they're not just about price
• 8:02
  anymore. So it's value now.
• 8:03
  I think that narrative is actually quite good.
• 8:06
  I think in the US, TikTok Shop is reported to have doubled in
• 8:10
  sales this year compared to before.
• 8:14
  And I think the biggest winner for me for TikTok Shop going so
• 8:17
  well is the fact that the small and medium sellers are now
• 8:21
  thriving. They have a place on, they have
• 8:22
  a platform, they are able to expand their category debt
• 8:26
  because of technology enabling. And it is evolution that I think
• 8:30
  TikTok Shop is going through and that I think it's worth keeping
• 8:33
  our eyes on for the whole of next year.
• 8:36
  Yeah, I think in the UK they were one of the biggest sources
• 8:41
  of shopping, Black Friday, Cyber Monday.
• 8:44
  So they've done phenomenally well, going from strength to
• 8:46
  strength and you only imagine it continuing as another channel
• 8:50
  from a gentic perspective, from all the interviews that I've
• 8:53
  done this year, it's interesting.
• 8:55
  Some marketplaces aren't allowing Chachi PT to come in
• 8:59
  scrape and purchase because they want to keep their pricing
• 9:03
  private. They don't want the agents.
• 9:06
  And, and I found that that's an interesting decision that
• 9:08
  retailers are going to have to make.
• 9:10
  Do we allow marketplaces, do we allow the agent to come in and
• 9:14
  leave or not? And then going back to your
• 9:17
  point view and in terms of retailers being ready, it's
• 9:20
  understanding that your product pages, your PDP's are now
• 9:25
  serving machines and humans. And each shopping mission is
• 9:29
  different in its in, you know, so for example, a Toot Me bag is
• 9:35
  made out of whatever nylon, polyester, whatever the, the
• 9:40
  materials are, but it's an F1 bag as well.
• 9:44
  So how do you get your product pages to bring emotion into the
• 9:48
  AI journey? And I think that's the probably
• 9:50
  the biggest challenge for retailers on how they bring
• 9:53
  these different elements to life.
• 9:56
  Reef coming back to you for your final one.
• 9:59
  Right. So I'm going to talk a little
• 10:01
  bit today about subscription retail.
• 10:03
  We've said obviously North America has seen, you know, by
• 10:07
  far the most mature market institution, probably led by
• 10:10
  Amazon, you know, but and that that that Senate manifest in a
• 10:15
  lot of terms of bundling. Obviously we all know Amazon
• 10:17
  Prime, we can't get away from that, but you know, but bundling
• 10:21
  of services. But then you've got food
• 10:22
  delivery, we've got fashion, you've got so many different
• 10:25
  beauty as well. So you're seeing that in all
• 10:28
  fast facets. But when we come to Asia
• 10:29
  Pacific, it's become really clear that this is a fast
• 10:33
  growing area in our region. So growth rates of about 20% a
• 10:38
  year for the for across the next decade and putting it clearly in
• 10:43
  #2 so really fast growing hypertension growth.
• 10:46
  So if you're a retailer agent Pacific and you aren't thinking
• 10:49
  about subscription based retail in your category, I think you
• 10:53
  need to think again, because this is where a bundle of growth
• 10:56
  is happening right now. And we're we're seeing retailers
• 10:59
  increasingly adopted to stabilise revenues and deepen
• 11:01
  their engagement with their customers to have an ongoing
• 11:04
  dialogue with them because there's a billing relationship.
• 11:07
  You know, in the Asia Pacific region, we're seeing categories
• 11:10
  such as beauty, fashion, food. And for example, in Japan, Japan
• 11:15
  crate, it's candy, it's snacks, it's drinks or or Tokyo treat.
• 11:19
  So lots of stuff happening in Japan.
• 11:20
  In Australia, L'oreal's lunch or L'Oreal Australia beauty box.
• 11:24
  So it's you subscribe to Q added seasonal boxes of fragrances,
• 11:27
  hair care, cosmetics, skin care. Now this is a brand that's sold
• 11:31
  through supermarket and now it's selling direct to consumer via
• 11:34
  subscription based services. Obviously we're seeing food and
• 11:36
  beverage, Australia's big and food and beverage.
• 11:38
  But right across the region, we're seeing food and beverage.
• 11:40
  And then we're seeing it at augmented in Asia through the
• 11:43
  development of the growth of the Super apps Grab, Gojek, you
• 11:46
  know, and then also in, in, you know, Southeast Asia.
• 11:49
  And then obviously up in China, you can't get away from the
• 11:52
  Super app from WeChat and Alibaba.
• 11:54
  But then the last 1 is really about the bundling.
• 11:57
  And this is a real Western thing.
• 11:58
  So you're seeing people delivering, you know, media
• 12:01
  services with like Amazon Prime. But probably the most successful
• 12:06
  in the region has been coupons membership programme Rail Rocket
• 12:09
  Wow, which bundles fast free delivery with integrated
• 12:12
  streaming content. So they're actually running a
• 12:14
  hybrid subscription service which has subscription free
• 12:18
  delivery. It has services such as retail,
• 12:21
  but then obviously coupangs, because coupangs rapidly
• 12:24
  expanding, it's allowing consumers to to engage in
• 12:27
  categories like luxury retail, but through their subscription
• 12:29
  platform. So I would say, you know, if
• 12:32
  you're an APEC retailer and you're looking to find a new
• 12:34
  place, looking to find a new growth era subscription
• 12:37
  retailer, something to consider. OK, perfect.
• 12:39
  Listen, I want to keep us underneath the 15 minute window
• 12:43
  for LinkedIn. And so with that, I wish you
• 12:46
  both a wonderful, wonderful holiday season, however you may
• 12:49
  be celebrating it, and I look forward to speaking to you in
• 12:53
  the new year. Like OK.
• 12:55
  Alright, Merry Christmas.