Latest / The Retail Podcast / APAC Retail in 13 Minutes: Mobile Commerce, 1-Hour Delivery, Korea Tourism, Urban Revivo, AI Grocery

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APAC Retail in 13 Minutes: Mobile Commerce, 1-Hour Delivery, Korea Tourism, Urban Revivo, AI Grocery · The Retail Podcast

• 0:00
  Hi, I'm Reef Quown. I'm the Managing Director of NRF
• 0:03
  Retails Big Show Asia Pacific, and this is Five Things Friday
• 0:07
  AIPAC edition. Reef How are you, Sir?
• 0:21
  I'm good. Thank you, Alex.
• 0:22
  How are you my friend? Really good.
• 0:24
  We're going to have another tight packed edition of the
• 0:27
  show. By the way, this show's going
• 0:29
  strength to strength. I can't name names, but we're
• 0:32
  ranking in the top global 5 of retail podcasts and depending
• 0:37
  which market you go, that goes up to top 2.
• 0:42
  So I'm super happy. I'm super.
• 0:45
  Happy we're going. All right, Adam.
• 0:46
  I've never been this popular in my life.
• 0:48
  No one ever talks to me. So I'm actually quite excited.
• 0:51
  Thank you, Alex. I'm still working with being
• 0:53
  popular. Popped.
• 0:55
  I feel very excited now. All right, here we go.
• 0:57
  All right. Too much.
• 0:58
  Am I going? I'm going first, aren't I?
• 1:00
  You're going first, Sir all. Right.
• 1:01
  Cool, cool, cool. Now, today I'm going to talk a
• 1:04
  little bit about e-commerce and we're going to draw some
• 1:07
  comparisons between Asia Pacific, North America and
• 1:11
  Europe. And one of the things I'll talk
• 1:13
  about with Asia Pacific e-commerce is Asia Pacific
• 1:16
  e-commerce is still growing freight train quickly.
• 1:20
  And what I mean by that is we're seeing, we'll see in 2023, AIPAC
• 1:24
  e-commerce generated about 7.19 billion US by 20-30, it's set to
• 1:30
  hit 24 billion. Wow.
• 1:32
  We're looking at compound annual growth rates of somewhere in the
• 1:35
  eighteen 1920%, which is absolutely staggering.
• 1:40
  But the yeah, it's, it's absolutely mind blowing.
• 1:42
  You know, So yeah, you're thinking about a market which is
• 1:44
  one of the biggest retail marketplace in the world, if not
• 1:46
  the biggest. And we've got e-commerce growing
• 1:48
  at close to 20%. But the really interesting thing
• 1:51
  about that is, is in 2023 alone, so, and it continues to happen.
• 1:56
  It's, it's more and more as people like Vietnam, Indonesia
• 1:59
  come on stream, 81% of those ecommerce sales are on a mobile
• 2:04
  device. Yeah, OK.
• 2:05
  And it's mostly through apps now that is like because as an
• 2:11
  American retailer or North or a European retailer coming down to
• 2:14
  Asia, Asia is now diverged, Asia Pacific is now diverged.
• 2:18
  And you cannot treat and you cannot just turn up and do the
• 2:21
  same thing because it ain't gonna work.
• 2:23
  Now when I look at, when I look at look at Europe and and the
• 2:27
  US, yeah, obviously we're still talking about big numbers, but
• 2:30
  compound annual growth rates of 9% in Europe, 9% in America now.
• 2:34
  So, so 18% of all U.S. sales is e-commerce.
• 2:38
  That's only growing at 9:00 percent year on year.
• 2:41
  OK. And if you look at that in terms
• 2:43
  of mobile, you know mobile in the US, which is a fairly good
• 2:48
  representation is only 44%. So we've talked about 81 in Asia
• 2:53
  and 44. So you can see now we've got
• 2:57
  slow e-commerce growth. It's more mature, I'll give you
• 2:59
  that. But there's a real divergent in
• 3:02
  the method in people that e-commerce undertaking shopping,
• 3:06
  you know, North America holds about I think.
• 3:08
  I thought it was a done done dusted thing as an ecommerce was
• 3:11
  at its maximum. That's it.
• 3:13
  It's going to be 17% of. Your no, no, no, it's, it's
• 3:16
  still growing. It's still growing quite
• 3:18
  consistently. So it's taking, it's still
• 3:20
  taking a much bigger share, 8-9 percent a year growth in North
• 3:23
  America and Europe, not growing at 1920% as in in Asia Pacific.
• 3:28
  But the method is different. The method is different.
• 3:31
  So we're seeing half, 444344 percent on mobile in the US, 81%
• 3:37
  on mobile in Asia. And that's because, you know,
• 3:40
  you look at some of those markets like Vietnam, Indonesia,
• 3:42
  they weren't terrestrial board broadband networks.
• 3:44
  It was always been mobile LED. So it's the natural device to to
• 3:49
  shop on because there wasn't a home computer.
• 3:50
  There wasn't a laptop or a desktop sitting in the home.
• 3:53
  So that's, that's my it's, it's pretty wicked because, you know,
• 3:56
  that is a real separation between the markets.
• 4:00
  Yeah, we're still having insane growth, but the markets are
• 4:03
  going and now diverging. OK, well, on, on, on staying
• 4:07
  with that. What is super interesting for me
• 4:10
  definitely is again something that I thought was done in China
• 4:14
  is delivery because I assumed like in India delivery is done,
• 4:19
  but China's going into its instant retail price war.
• 4:22
  By instant, I mean deliveries of one hour.
• 4:25
  You've got the big players such as Alibaba, Newton and jd.com
• 4:29
  who are pouring billions into one hour delivery, which is
• 4:34
  fantastic for users because they're getting subsidies in
• 4:37
  their delivery. So they're not footing the bill
• 4:40
  that the provider is getting cheaper baskets and faster drop
• 4:44
  offs. However, some expect maybe this
• 4:47
  will lead to actual profit warnings and maybe even a
• 4:50
  tighter embrace from CCP in terms of unfair advantage over
• 4:56
  other players in the delivery scene.
• 4:58
  But I think keeping delivery to someone hour across such a vast
• 5:03
  nation, Yeah, it's a shape of things to come and what we'll
• 5:08
  do. Stay with me.
• 5:09
  So we. Yeah.
• 5:10
  I was going to say. Sorry, got me.
• 5:12
  I was going to say, I was going to say sorry to interrupt.
• 5:14
  I like interrupting, you know that.
• 5:17
  But you know, the Beijing is such an like, if you go to
• 5:22
  Beijing, it's such a massive city.
• 5:23
  It feels much more spread out than, say, Mumbai.
• 5:26
  Yeah. But I think, I think these
• 5:28
  profit warnings, I think the Indian, the Indian lesson is
• 5:31
  that the consumer was prepared to pay.
• 5:33
  So when if the CCP decide that, you know, we're not subsidising
• 5:36
  this anymore and we need to take away this unfair advantage and
• 5:40
  let everyone flourish and, and prosper, I think we'll find that
• 5:45
  the consumer will pay for it in, in China as well.
• 5:47
  I think ultimately the consumer will get the, the early, the
• 5:51
  early adopters will get the benefit, but it can't be any
• 5:53
  other way. Ultimately, the economic says
• 5:55
  the consumer must pay for the convenience.
• 5:57
  Yeah, it's interesting and yeah, I'm not going to.
• 6:00
  It's interesting, but I can't call on it because of time.
• 6:02
  So the other the same with Chinese, but our other favourite
• 6:07
  region that we always talk about Korea Chinese.
• 6:10
  We love Korea much. From September 29th, so Chinese
• 6:14
  tour group are going to get visa free travel to Korea.
• 6:17
  And actually what this has led to is retail.
• 6:21
  Our retailers in Korea, department stores, duty free
• 6:25
  operators and convenience chains are now ramping up their
• 6:29
  staffing and assortment to meet this new code.
• 6:33
  It's not a new cohort, sorry. There is already a massive
• 6:37
  influx of Chinese tourists in Korea.
• 6:39
  But now with this, you know, we talked about K pop and its
• 6:42
  influence and one day we will talk about K pop demon hunters.
• 6:46
  But oh. We will.
• 6:47
  I'm coming. I'm coming.
• 6:49
  They're they're they're doing so well that this Chinese free
• 6:54
  Chinese visa free group travel is proving to be a big boost for
• 7:00
  the retail community and finally.
• 7:03
  Can I add one thing? One of the things, one of the
• 7:06
  things in the geopolitical context is China, Korea and
• 7:10
  Japan have done a trade agreement, which is.
• 7:14
  Which? Which has been something I
• 7:16
  didn't think that I'd ever see happen.
• 7:18
  But I think the current context of what's happening in North
• 7:20
  America has led to this. And I think that, you know,
• 7:24
  there is so much demand for Korean product or in the room,
• 7:27
  particularly in China. And you only have to look at
• 7:30
  Japan and say, well, 20% of retail in Japan is retail
• 7:35
  tourism, right? So when they're they're all so
• 7:38
  close together, I, I this is going to be a boon, an absolute
• 7:43
  boon for Korea. Like you, the demand that for
• 7:45
  Korean goods in China is, is is astronomical.
• 7:50
  Yeah. So this will be this will this
• 7:52
  will be amazing. Another, I'm gonna just quickly
• 7:54
  touch on this and then move on. Young brands who own or the
• 7:59
  operators of many Western brands, as you can see, such as
• 8:03
  KFC, they're, they're set to be continued their growth.
• 8:09
  They're buying back shares. They have 1.5 billion in
• 8:12
  turnover in 2020, are set to have 1.5 billion turnover in
• 8:17
  2025. But the the interesting thing
• 8:19
  here is they're going for smaller formats.
• 8:21
  They're changing their menus to fit the local taste because
• 8:24
  across the region there's such a a vast array of tastes and
• 8:29
  palates. And they're also going for
• 8:31
  tighter delivery operations. So if you like changing what
• 8:35
  they do in the West to me, what's happening in the in, in,
• 8:39
  in the east, leaning on what you were saying reef in terms of
• 8:43
  don't think you can turn up and be a fantastic marketing machine
• 8:47
  and, and, and push on that. And the final story that I'd,
• 8:51
  I'd like to share is one that I've been popping on about for,
• 8:55
  for a couple of years where, you know, I've, I've sort of, you
• 8:58
  know, raised the flags and said, hey, retailers over here in the
• 9:03
  West, China has been or Chinese retailers have been slowly
• 9:07
  progressing their technology, progressing their assortment,
• 9:10
  progressing their operations to be able to expand globally.
• 9:14
  And so once you've got your operations and technology and
• 9:17
  then you move into marketing, you can start expanding.
• 9:20
  And so Urban Revivo is going hard after Zara and HM's market
• 9:25
  share, they are set to open over 200 stores across the overseas.
• 9:32
  They've put, so they've already opened two flagship stores in
• 9:35
  London, But over the next five years, expect to see over 200
• 9:39
  stores in Europe, in the US And I think this is just the start.
• 9:44
  So until the regulations change, I expect the retail landscape
• 9:48
  and retail High Street to continue to expand and change,
• 9:52
  which may actually be a needed thing in regions such as the UK.
• 9:57
  OK, closing with you, Reef my friend.
• 9:59
  Right, something really special happened in the region was about
• 10:04
  10 days ago actually a little bit longer.
• 10:06
  So at the NRF big show this year in APAC, we had a fair price
• 10:11
  present their store of tomorrow in an exhibit.
• 10:13
  And we, we walk through you and I walk through that Alex and
• 10:16
  yeah, had a really great experience and met with Dennis
• 10:18
  CEO, the CFCIO. But here they've actually
• 10:22
  launched the first store and this is launched in the Pongal
• 10:26
  Digital District in Singapore. So this is the the store of
• 10:29
  tomorrow. And this is mind blowing.
• 10:32
  So when you look at this, this store, this is probably the best
• 10:37
  implementation of AI in the customer experience that we've
• 10:42
  ever seen. Yeah.
• 10:43
  And Thomas Korean, who's a global CEO of Google Cloud,
• 10:47
  because fair Price of partnered with Google Cloud came out and
• 10:49
  he basically echoed those sentiments like, so that's high
• 10:53
  praise indeed. So basically what you talk about
• 10:56
  here is you're walking into the store, you've got your fair
• 10:59
  price app, you link it to your smart card.
• 11:01
  The smart card's got cameras all over it.
• 11:05
  There's cameras all in the store.
• 11:07
  You can, you can go and buy your products.
• 11:09
  When you get to the when you get to the the the the shelf where
• 11:14
  the product is, the the the price tag flashes at you to tell
• 11:18
  you that's the one you want. All right.
• 11:20
  Yeah, it's unbelievable. Like it knows you're there and
• 11:22
  then it it navigates you round the store to support your
• 11:25
  shopping, shopping based on your app and then makes
• 11:28
  recommendations. So this this is wild.
• 11:32
  It's unbelievable. So I'm going back to Singapore
• 11:35
  in November and we will have a 2 tour of this store in the show
• 11:39
  next year. And next year I hope fair prize
• 11:41
  will talk about because I probably have eight months of
• 11:42
  data to talk about when we get to the show next year.
• 11:45
  But this is something that is absolutely insane.
• 11:49
  It's a Gen AI powered supermarket.
• 11:51
  It's it's obviously the biggest supermarket group in in
• 11:54
  Singapore. And you can see in this it's,
• 11:56
  it's a big deal. Like is the, the special
• 11:58
  minister low, the government, there's Vipul Chala, the CEO,
• 12:02
  Denisia, the CEO in this picture here.
• 12:06
  It is absolutely, absolutely amazing.
• 12:08
  So it's, it's, it's like, it's a supermarket experience.
• 12:12
  There's no one's ever experienced anywhere in the
• 12:14
  world. Yeah.
• 12:16
  And, and I would say to you, if you go to Singapore, there's
• 12:19
  lots of things to see and do, but go to the Pongal digital
• 12:22
  district and go and, and go shopping because it's, it's
• 12:25
  wild. It will be absolutely wild.
• 12:27
  And I'm I'm really excited to go and see this when I'm up there
• 12:29
  later in the year. Yeah, you remind me.
• 12:31
  I need to check whether or not we published the interview that
• 12:34
  we did on the Fair price store of the future NRF.
• 12:37
  I can't remember if we didn't publish it or not.
• 12:40
  We. Yeah, we'll.
• 12:40
  Interview that I. Remember that that whole sample
• 12:43
  and even things like when you go into the store, you can get a
• 12:46
  like a ABMI done and it'll, it'll actually recommend your
• 12:50
  whole diet within the supermarket.
• 12:52
  So it's all it links the, the assessment of the person to the
• 12:55
  shopping list of the person and then and links it to taste in
• 12:58
  that. It's it's wild, it's
• 12:59
  unbelievable. Well, on on that bombshell, I
• 13:01
  like to say let's bop out on our on our rocky anthem that we have
• 13:07
  that's called the Five Things Friday anthem.
• 13:11
  Until next week, my friend. Thank you my friend.
• 13:13
  Take care and we might have Laura back next week.
• 13:16
  Hey. Yeah, hopefully she's she's
• 13:18
  she's now back in Sydney, so. That'll add some, that'll add
• 13:21
  some quality, so that's good. Yeah.