The rise of Asia in the context of economic growth is imminent and the region holds massive potential for retail. As the Chairman of the Federation of Asia Pacific Retailers Associations (FAPRA) Murali Prakash noted on LMDtv not long ago, “Asia is the engine of growth for retail.”

“Retail is all about people and consumption, and it’s all happening in Asia,” he added.

He elaborated: “If you look at the Asia-Pacific region, GDP growth is more than five percent, and we are growing almost 50 percent faster than the rest of the world. Asia is also better equipped to uptake new technology – if you look at global e-commerce, the Asia-Pacific accounts for more than 50 percent, resulting from the rapid growth witnessed over the last couple of years.”

“Digital transformation and e-commerce are very big, and every retailer has embraced them,” he observed. “The Asia-Pacific accounts for about US$ 4.2 trillion in terms of e-commerce, and we are expecting this to rise to between 6.5 and seven trillion dollars by the end of the decade.”

Prakash continued: “Even in terms of people, the region is home to around 60 percent of the global population. And the region’s upper middle-class segment is projected to increase by some 80 percent in the next decade.”

“It’s also said that if you take the total global consumption and isolate the Asia-Pacific, we account for more than 50 percent of it,” he noted.

This positive outlook comes on the back of multiple challenges faced by the sector stemming from the pandemic, geopolitical tensions and other supply chain related interruptions.

Retail is the front facing sector of the brunt of all challenges, he explained, adding that the resilience and adapta­bility of retailers, and their thorough understanding of consumers, helped them bounce back stronger.

As he said, “many retailers reinvented their business models. For instance, everyone faced massive issues in supply chains after the pandemic so retailers have gone to the next level with technology, be it last mile delivery or changing suppliers in between.”

“Many retailers also went to a granular level such as reinventing their stores to make them more profitable with different types of products and different assortments,” he added.

Prakash cited two post-pandemic trends that are growing in significance: ‘recommerce’ and quick commerce, the latter of which relates to people’s need for instant gratification.

He elaborated on the dynamics of recommerce: “It refers to reselling used items. This partially stems from the trend towards sustainability and partially due to cost reasons. Recommerce is currently valued at about US$ 64 billion worldwide, and they’re projecting that this will grow four times faster than retail. It is expected to be around 300 billion dollars by the turn of the decade.”

The future of retail is digital and the world is in the midst of a technology revolution.

“Innovation is said to be the mother of everything in terms of business but there’s also a misconception that innovation is all about launching a product or service every now and then,” he argued.

Moreover, Prakash explained that “innovation has to be part of your organisation’s culture. For example, IKEA constantly puts out many new products. And it has empowered employees to make this happen; it has systems to recognise and reward them – it’s the way IKEA works.”

“Every day, they come into work thinking, ‘what can I do better to augment the customer journey?’ To brew an innovation based culture, you’ve got to build entrepreneurship within your organisation.”

Organisations must also deploy technology and consider collaborations to complement an innovation based culture.

“If you want to be innovative, then you have to use technology and also look at cross-industry collaborations and strategic alliances, which can bring new thinking and new ways of looking at your business,” he concluded.