Latest / The Retail Podcast / Five Things Friday APAC– Luxury Shifts, Honjok Retail, Vietnam’s Boom & More

Transcript

Five Things Friday APAC– Luxury Shifts, Honjok Retail, Vietnam’s Boom & More · The Retail Podcast

• 0:00
  I'm Reef Quail, managing director of AIPAC, and this is
• 0:03
  Five things Friday. Hello.
• 0:18
  How? Are you?
• 0:18
  Is it popping? Oh, is this bopping away to the
• 0:20
  intro music that was? Yeah, well, we'll have to
• 0:22
  release that as a single one day soon.
• 0:24
  It'll be the tease out of track. Anyway, How's it going?
• 0:26
  How's your week been? Yeah.
• 0:27
  It's been, it's been pretty good.
• 0:28
  You know, it's been not the things happening we're into
• 0:30
  we're into the budget cycles of 2026 for NRF and what will what
• 0:34
  are the levers that will make it grow.
• 0:36
  We've done some off sites and some planning and what was up in
• 0:38
  Singapore, we and NRF APEC actually won best trade show
• 0:42
  launch in Singapore two weeks away.
• 0:44
  So congratulations, it's very exciting.
• 0:47
  So we had a bit of a win and it's great recognition for the
• 0:49
  team. So that was just awesome, so.
• 0:51
  My knees up. I was.
• 0:54
  No, it was. That was a poor answer, wasn't
• 0:57
  it? No.
• 0:58
  Yeah. I had a couple of glasses of
• 0:59
  wine and and and caught up with a few friends And where the
• 1:02
  trophy on stage. That's cool.
• 1:04
  That's fantastic. Well, well deserved.
• 1:05
  Congratulations. Thank you.
• 1:07
  Very. OK, listen, I'm as always, we're
• 1:09
  gonna just, we're gonna for, for those.
• 1:11
  I'm well, I'm sure you're watching this because maybe
• 1:13
  you've watched one of the other episodes.
• 1:15
  If you haven't, we're gonna cover the top five news articles
• 1:17
  across one of the largest regions in the in in the, in the
• 1:21
  hemisphere. And I and I love the that
• 1:23
  obviously you're sat there in a jumper and I'm here in a T-shirt
• 1:26
  showing how global the global weather.
• 1:30
  It's very cold in Sydney today. I'm early struggling.
• 1:32
  I'm I'm running between turning the heater on and off.
• 1:34
  I've got a heater on. What?
• 1:35
  What? Just out of curiosity, what's
• 1:36
  the temperature that you've got? I reckon it's about hang on,
• 1:39
  I'll tell you on my phone, 16°. OK.
• 1:42
  And that's really cold for you. Yeah, Sydney's not too bad in
• 1:44
  the winter. I still might even get a surf
• 1:46
  tomorrow morning. You never know before what.
• 1:48
  Anyway, OK, fantastic. I.
• 1:50
  Think you should start that. I think we should take that.
• 1:52
  We've talked about luxury over the last few weeks.
• 1:54
  I said, I think, I think you you've got a good luxury one to
• 1:56
  start with that because I think this is the, this is the base
• 1:59
  that I think the big elephant in the room.
• 2:00
  Perfect. OK, All right.
• 2:02
  So yeah, we as, as Ruth just mentioned, we've talked, we've
• 2:05
  spoken about how we're in this era of European brands going to
• 2:10
  China for their growth. And we've got to the stage where
• 2:14
  brands like Xu Xing Yong Tong, a Shanghai born and bred luxury
• 2:19
  fashion house that have been taking their designs to Paris
• 2:23
  Fashion Week have been well deserved.
• 2:26
  Sorry, have been really well received.
• 2:28
  And in my mind, again, this is what retailers in in the West
• 2:33
  need to be careful of because now you're getting these young
• 2:36
  designers who can go toe to toe from a design perspective.
• 2:41
  And hence why I think maybe we're seeing a bit of a, a
• 2:44
  decline in luxury in the region because of these types of brands
• 2:49
  that are growing and will only continue to grow because
• 2:53
  technology is not an issue. It's about creativity.
• 2:56
  And I think now China's young designers and fashionistas at
• 3:01
  that point where they've been sort of consuming all of this
• 3:04
  Western retail and now they're bringing their their sort of
• 3:08
  spin to it. I think also too just, you know,
• 3:11
  this is Chinese style cultural authenticity, you know that, you
• 3:15
  know, it's, it's really bringing this home.
• 3:17
  And I think for me now, these brands are well placed because,
• 3:20
  you know, we've seen what's happened with some of the other
• 3:23
  European maisons. Yeah, these are products that's,
• 3:26
  you know built in Asia for Asia and have have real cultural.
• 3:29
  Resonance I think 1 to watch they're on far fetched they're
• 3:32
  on all the different e-commerce luxury platforms that exist over
• 3:36
  here and so I again, I just think this is a a sample of
• 3:40
  what. To come, absolutely.
• 3:42
  Oh, it's my turn then. OK, I'm ready.
• 3:45
  I'm ready. So I'm going to talk about a
• 3:46
  brand new cultural phenomenon in Korea.
• 3:50
  OK Korea. Korea's got this thing going on,
• 3:53
  which is a big, it's impacting retail significant.
• 3:55
  It's called the Hjrock culture. Hjrock HONJ.
• 4:00
  OK. And it literally translates to a
• 4:03
  lone tribe. Wow.
• 4:04
  And what it talks about, it describes people, especially
• 4:07
  millennials and Gen Z's who love to live, eat, travel and shop
• 4:12
  alone. I mean, not loneliness, but
• 4:14
  about self-reliance and freedom, Right.
• 4:16
  And So what we're seeing now in career is, you know, it had one
• 4:21
  of the highest rates of one person households in the world
• 4:24
  with 33% in 2024, right? Yeah.
• 4:26
  So that impact on retail has been really felt, you know,
• 4:30
  whether it's eating alone at restaurants or drinking alone or
• 4:32
  watching movies alone or solo travel.
• 4:34
  But in retail, you know, we're seeing the whole ranging and
• 4:38
  product evolution. So more single serving packaging
• 4:42
  in every form for meal kits to cosmetics, you know, things like
• 4:45
  store layout with smaller tables, private booths and and
• 4:48
  solo friendly atmospheres. No shopping on your own rather
• 4:51
  than in in couples or in a family.
• 4:53
  Yeah, brands messages are really now talking about, you know,
• 4:57
  about not about family time, but me time and treat yourself as
• 5:01
  aspirational. Not a sad thing, but an
• 5:02
  aspirational thing. Yeah, but like services, you're
• 5:06
  seeing subscription boxes, you know, meal box just flying to
• 5:10
  the roof, going to the roof, hobby kits, personalised
• 5:13
  shopping experiences tailored to one person.
• 5:15
  Yeah. And anything that manifesting in
• 5:17
  convenience stores like CU, GS25711.
• 5:20
  And they're and they're innovating and ready to eat
• 5:22
  premium meals for solo consumption.
• 5:25
  This is a lifestyle shift. This is a trend in career which
• 5:28
  is wild. And it's driven by our Gen ZS
• 5:30
  and millennials. They're about choosing to live
• 5:32
  alone. Yeah, it's incredible.
• 5:33
  I was just I just literally googled it when you said and
• 5:37
  obviously the Han jock is is like the the main, but then it's
• 5:42
  everything that you're saying in the Han Bap, which is the
• 5:45
  growing interest in culture causing like there's there's
• 5:47
  lots. Of different ways.
• 5:49
  There's single room karaoke. You could do karaoke.
• 5:53
  I can. I can go to that karaoke room,
• 5:55
  cry my eyes out and sing all by myself.
• 5:59
  I finally got a space. I've always wanted to sing,
• 6:02
  always wanted to sing Oops I did it again by Britney Spears on
• 6:05
  my. Own But yeah, I mean, I, I have
• 6:07
  to be honest, when I when you read things like this, you do
• 6:10
  feel that this is a trend that as as sad as it is to say that
• 6:15
  you can see growing, you know, people are choosing not to get
• 6:18
  married. They're choosing not to
• 6:20
  necessarily go into relationships.
• 6:21
  And I think, wow, sad, but what a harsh reality that we live in.
• 6:27
  Yeah. So I mean, that's I mean, for
• 6:28
  me, that was like, you know, looking at looking at things in
• 6:31
  Korea because I mean, I mean, the Korean experience is quite a
• 6:33
  unique experience in Asia because I cut off a little by
• 6:36
  language and they're quite inward looking.
• 6:38
  Yeah. And so in Japanese, you go to
• 6:40
  Japan, Tokyo feels, you know, a bit more a bit more inclusive.
• 6:44
  But yeah, Korea is the language and culture and you know,
• 6:47
  they're homegrown brands and K beauty and culture and all the
• 6:51
  things coming out of Korea. It's very much set in a Korean
• 6:54
  Koreans steer. It's happening unique to that
• 6:57
  country, which is so Han Jock is, you know, I'm not surprised
• 7:00
  that they're creating movements like this, you know?
• 7:02
  I think what a nice segue as well into the next one.
• 7:05
  Again, talking about beauty brands, brands the, and this
• 7:08
  specific K beauty, K beauty as a category is growing globally.
• 7:12
  And this brand specifically is now growing in the US and
• 7:16
  they're called a new which I, I was covering Haley Bieber's
• 7:20
  brand in the US that she just sold for a billion in May,
• 7:23
  earlier May, May this year. And these new beauty brands
• 7:28
  creating communities using influences, obviously using new
• 7:32
  science and really challenging the old vanguard of the beauty
• 7:38
  providers, which are, you know, the big CPG companies again, as
• 7:42
  it feels like not problematic, but as as interesting or the the
• 7:47
  Korean societies, they're able to export so many.
• 7:52
  Popular, it's an amazing and fascinating country and it but
• 7:55
  it's just because they have this separation that they can come up
• 7:58
  with some some of this unique cultural iconic K beauty and K
• 8:03
  pop. It's it is so unique to them,
• 8:04
  but it's just, you know, I think it's a reflection of the way
• 8:08
  they operate with the rest of the world.
• 8:09
  But it's just it means that this creative creativity happens in
• 8:12
  this bubble, which is career that is just so unique and so
• 8:15
  different and in many cases so appealing because it's hard to
• 8:18
  find anywhere else. So on to mine now and my one,
• 8:21
  this is a bit of a wild card Last week we we started to we
• 8:24
  talked a little bit about luxury Yep.
• 8:27
  And I talked about luxury in the Asia Pacific market and we'll
• 8:29
  that, that we might that bet will come to air, I'm sure
• 8:32
  because we recorded it and I haven't seen a lot of that yet,
• 8:34
  but I wanted to build on that thought.
• 8:35
  And when I started digging into the numbers, I really started to
• 8:38
  notice in some markets who were flat, some brands were going up,
• 8:41
  some brands were going down. China was definitely dropping
• 8:44
  back in terms of luxury and that for the European Maison, but
• 8:47
  might be growing for the Chinese houses.
• 8:49
  But what I did notice was just the incredible growth in Vietnam
• 8:53
  and retail growth. And so I thought well, let's
• 8:55
  delve a little bit wider to that.
• 8:56
  And I think one of the things I've noticed is that Vietnam is
• 9:00
  is basically has hit the road like it is going.
• 9:03
  So in retail sales in Vietnam hit $300 billion US in 2024.
• 9:08
  By 2029 it's going to be 400 and nearly $500 billion and it's
• 9:13
  growing at 12% annually. So it's insane.
• 9:17
  And then what you've seen is this real appetite for
• 9:20
  ecommerce, social media and cross-border.
• 9:22
  So ecommerce growth 30, ecommerce GMV jumped 37% in
• 9:27
  2024. Wow.
• 9:29
  And it's platforms like Shoppi, Lazada, TikTok Shop and Sendo
• 9:34
  who are really leading the charge.
• 9:35
  You know, so you know, and you know things like not 57% of
• 9:39
  transactions are occurring on a phone.
• 9:40
  OK, so mobile phones. Yeah, so huge growth, multi
• 9:45
  regional platforms coming in and and really mobile first.
• 9:49
  I mean career is I think I want to say 70 to 75% mobile phone
• 9:54
  LED in the digital context. So they are the kings of mobile
• 9:56
  phone, right. Yeah, they are amazing.
• 9:58
  But you know, Vietnam, holy cow, what a market and what, what
• 10:02
  growth. And, and that this could have
• 10:04
  came out of the, the digging around on luxury last week that
• 10:06
  I thought, wow, Vietnam seems to be growing really dramatically
• 10:09
  on luxury from albeit a low base.
• 10:11
  But when I look at overall retail, this is This country's a
• 10:14
  juggernaut. It's like everyone's, everyone's
• 10:16
  flat. Do you have to a view on on why
• 10:19
  you think that is? What what's going on?
• 10:21
  Is it? Is it the that they have?
• 10:23
  Matt, this is this is the piece I talked about without with with
• 10:26
  Asia Pacific and you talk about the Southeast Asian nations
• 10:29
  outside of Singapore. You know, we're seeing the great
• 10:31
  equalisation happen right now. Wealth is increasing, right?
• 10:35
  Yeah. So we're seeing wealth increased
• 10:37
  and people joining the middle class in rapid rate right across
• 10:40
  the region. And I think there is therein
• 10:42
  lies a change. And as more wealth is happening,
• 10:45
  people are travelling there as well.
• 10:46
  So I haven't got any information on, on tourism, but I mean, I
• 10:50
  know a lot really go to Vietnam, but I haven't got any own
• 10:52
  tourism and retail in Vietnam. But the numbers are suggest to
• 10:56
  me that the, the growth in wealth in Vietnam and the rise
• 10:59
  in the middle class is, is phenomenal.
• 11:02
  And but yes, that's not, that's not unique to Vietnam, you know,
• 11:05
  that's you're seeing Indonesia, Malaysia, the Philippines,
• 11:08
  Thailand a bit further on and obviously Singapore's well, well
• 11:11
  progressed. But you know, these Southeast
• 11:14
  Asian markets are accelerating. It's been, it's fascinating.
• 11:17
  It's a much younger market too, to quite a youthful market.
• 11:20
  That's right. And it's it's one to watch.
• 11:23
  I mean, as you said, it's the great equaliser, which to me it
• 11:26
  just signals more opportunity according.
• 11:29
  And the region and so therefore I mean and then and I was
• 11:32
  looking last week as everyone in luxury and it was the mega
• 11:35
  growth market in luxury. It was coming out of from
• 11:37
  smaller numbers, but it's serious growth happening and
• 11:40
  it's not a small country, Vietnam.
• 11:41
  As you know, Laura has on her global travels around the world,
• 11:45
  so she's not with us, but I'm hoping we'll be able to go to
• 11:48
  Laura now. Hi Alex, it's Laura here from
• 11:51
  Ishmaela in Turkey. I'll start this off with anyone
• 11:55
  who doesn't know me too well. I have been living in Sydney,
• 11:59
  Australia for 15 years, since 2010 and I am one of the guilty
• 12:04
  ex but expats that go home every 12 to 18 months and I spend a
• 12:09
  lot of time with my family and yeah and pretty much pretend I'm
• 12:14
  back in Glasgow as if I never left.
• 12:16
  And I like to try and get a bit of a European holiday in the
• 12:19
  mix. So I'm on my jet too.
• 12:21
  If you know, you know package holiday with my family and my 2
• 12:24
  babies and yes, so I really apologise.
• 12:27
  I couldn't be there with you Alex live, but hopefully this
• 12:30
  quality, this video quality and sound is OK and you can use it.
• 12:34
  But no offence if you cut it out and please apologise.
• 12:37
  This is as best as I could muster today.
• 12:40
  This is this is as good as it's what you get.
• 12:42
  So I'll jump right in. I'll talk about my first point,
• 12:45
  which is around yacht poles announcements from yesterday.
• 12:48
  So very sad to hear that yacht pole is sunset in their e-mail
• 12:52
  and SMS product that came to market under two years ago.
• 12:57
  So what does that mean? It means that 200 people from
• 13:00
  the team globally have been let go.
• 13:02
  And yeah, the the decision's been made that they're just
• 13:05
  going to go back. It seems like they're really
• 13:07
  streamlining the team and going back to the focus on reviews and
• 13:11
  loyalty, which is where where they've always had their
• 13:15
  strength and being the leaders. I read the e-mail that Tom, the
• 13:19
  CEO sent to his team and he alluded to the fact that the
• 13:23
  market's a little bit saturated in the CRM, the communication
• 13:27
  space and that they had lost maybe their way from a product
• 13:31
  excellence standpoint, and that he wants to really go back to a
• 13:34
  bit more of a startup type approach.
• 13:37
  So very sad to see this happening for obviously everyone
• 13:41
  affected by it from the employees and also the retailers
• 13:44
  and brands who've spent probably a significant time with the
• 13:47
  migration to another, another product and tool.
• 13:50
  From from my standpoint, I have spent seven years before being
• 13:54
  out on my own, but seven years I was agency side part, owned an
• 13:56
  agency and Yacht Paul were one of my key partners for the top
• 14:00
  five. Great partner to work with,
• 14:02
  always the very professional. So I've always had a great
• 14:06
  experience. So we working with yacht Pole
• 14:08
  and this couldn't have been an easy decision to have made.
• 14:11
  Now this is not an Australia specific issue, it's a global
• 14:16
  one. But from my standpoint, from my
• 14:18
  perspective, it's a bit of a signal that from the brand and
• 14:21
  retailer side, they were the yacht pole, the team, the
• 14:25
  market. They were very with their sales
• 14:28
  strategy around this product. They were very price competitive
• 14:32
  to win business, which is not on it's, it's a typical tactic that
• 14:37
  you use to bring a product to market.
• 14:39
  So that's what they did. Lots of the road map, it's
• 14:43
  coming. So cost was definitely a part of
• 14:45
  why brands and retailers decided to move.
• 14:47
  But it wasn't the only part. And I don't think we should ever
• 14:51
  put it into a cost of that was only reason.
• 14:54
  A big reason was also because of the promise of consolidation.
• 14:58
  We have seen the best in breed Siword product stack, the
• 15:02
  maturity of the SAS vendors going up, building out the
• 15:06
  product suite and it made a lot of sense.
• 15:08
  The theme of loyalty has been so strong in Australia and New
• 15:12
  Zealand and APAC globally that you oppose a leader of views and
• 15:17
  loyalty. To have your communication lines
• 15:20
  in the one place made a lot of sense.
• 15:22
  The business case would have been quite appealing.
• 15:24
  So, yeah, a bit of a punished for the retailers going through
• 15:28
  this. They're going to have to try
• 15:30
  their best to migrate off of your pool as quick as they can.
• 15:33
  They're coming up to three months out from Black Friday,
• 15:36
  right? It's a busy time.
• 15:38
  Good news is it seems like the market is rallying around to try
• 15:42
  and support lots of offers out there, lots of, you know, price
• 15:46
  matching, lots of discounting for migrations and let's call it
• 15:50
  how it is. You know, this was this was
• 15:53
  sorted for many and now it gets to the top of the priority list
• 15:56
  because it's it's AP 1 to get solved.
• 15:59
  So there's that for me, it really resonates or lands and
• 16:04
  it's something that I've been thinking about a law and I mean,
• 16:06
  I'm not the only one to think about it, but Tom are in his
• 16:09
  e-mail mentions the disruption that AI is causing.
• 16:12
  And I think that we're going to see a lot more.
• 16:15
  I don't know if I always say casualties or potential SAS
• 16:19
  technologies that have branched into different product areas
• 16:21
  start to pull back. You know, he mentioned the fact
• 16:24
  of the tools like Lovable and some others that are start to
• 16:28
  make headway and disrupting the market.
• 16:30
  It's a really interesting 1. So I feel like we are that a lot
• 16:35
  of the SAS technologies are looking at how AI is going to be
• 16:38
  reshaping the road map with funding getting tighter and
• 16:41
  product decisions that once looked like a they looked smart
• 16:44
  in the race for platform consolidation and now been
• 16:47
  reversed at speed. Number 2 was I thought it was
• 16:50
  interesting was our own Gen Z and you know, think about it was
• 16:55
  like debit over drama. Gen Z have been of course,
• 16:58
  they're changing the game. They're always going to change
• 17:01
  the game. But it looks to me like, well,
• 17:03
  the industry is still a bit busy, like, you know, building
• 17:06
  some we're still building some sexy tools like virtual try ONS
• 17:10
  and slight little chat bots. The question is, has anyone
• 17:13
  really asked for these products? If they have cool, go for it.
• 17:16
  If that's your ICP, go for it. But it looks like the Gen Z are
• 17:20
  showing us that they're not as reckless as we think.
• 17:23
  They're not as they're not in that impulse as much, especially
• 17:26
  when it comes to ANZ. I'm talking more about ANZ.
• 17:28
  This might not resignate with anyone else.
• 17:31
  They're not spending. They're they're controlled.
• 17:33
  So this was according to 2025 ANZ online shopping report from
• 17:38
  Big Commerce, or should I say Commerce because they've just
• 17:41
  made a rebrand. More than half of 18 to 24 year
• 17:45
  olds are now using debit cards to shop instead of credit cards.
• 17:49
  This is the highest of any of the age brackets.
• 17:52
  They're not racking up points, they're not chasing cash backs.
• 17:55
  They're trying to spend more of what they have and it's a bit of
• 17:58
  a shift. So a couple of the other
• 18:00
  highlights from the report. Credit card usage is in decline.
• 18:03
  Visa is down 8% in the last two years.
• 18:06
  Free shipping still wins. 86% say it's a top loyalty perk.
• 18:11
  It's really funny, like, you know, just do a few shipping and
• 18:14
  just, you know, do it smart, of course, and make sure you have
• 18:17
  your cross sell, upsell your communication strategy, right?
• 18:21
  You know nothing's completely free delivery expectations.
• 18:24
  We've spoke about this people are happy to pay for speeds, but
• 18:28
  there's definitely shift bigger products, a big ticket delivery
• 18:31
  costs have plummeted. 97% of shoppers will abandoned cart if
• 18:36
  they feel fees are too high. Reviews matter and they matter a
• 18:40
  lot. 77% of of the Gen ZS won't buy if there's no reviews.
• 18:46
  I'm a a millennial and I'm, I'm, I'm the same.
• 18:48
  I, I didn't really think reviews impacted me that much,
• 18:52
  especially when I work in the tech space.
• 18:53
  And I can see how you can kind of play them a little bit, you
• 18:56
  know, only feature these types of reviews, but I still use
• 19:00
  them. I think what's coming across
• 19:02
  from his Gen ZS as they, they want more detailed information
• 19:05
  and reviews. They want more information in
• 19:07
  size and from real people. So it's quality over quantity.
• 19:11
  Yeah. And the, the shiny e-commerce
• 19:13
  features are falling flat. So get back to content, give
• 19:17
  them what they want. They're being a little bit more
• 19:20
  considered in their purchasing and again, personalization, they
• 19:23
  love it. They want things that are more
• 19:25
  personalised to them. So I don't think anyone really
• 19:28
  is doing this this year. But if you are, stop designing
• 19:31
  for hype, start designing for headspace Gen Z's.
• 19:35
  They're not impulsive. I think my mum's most impulsive
• 19:39
  shopper, even watching her in the last week.
• 19:40
  And you know, my mum's a boomer and they are crazy.
• 19:43
  But the Gen Z, they're informed, they're discerning with their
• 19:47
  spending and yeah, they're reshaping digital commerce and
• 19:52
  they they're looking for authentic brand experience.
• 19:56
  So that is my two points. I will be live next week from
• 20:01
  probably my house in Scotland. I am around the UK for the next
• 20:04
  four to six weeks. If anyone wants to catch up with
• 20:06
  me. I'll be in London as well for a
• 20:08
  few days. And Alex, I hope this is OK and
• 20:11
  I didn't ramble too much and I'll see you later.
• 20:14
  Bye. Adios and.
• 20:15
  Then I just. I can hear on the satellite.
• 20:20
  Coming in through the waves. Anyway, listen, thank you so
• 20:24
  much Reef for giving me some time this week to to go through
• 20:28
  it. Really appreciate it.
• 20:29
  Fantastic, Alex. Thanks for being letting me be
• 20:31
  part of it. Always good to talk.