Financial insecurities to slowdown APAC retail sales growth rate in 2021, says GlobalData

The general impact of COVID-19 pandemic in the Asia-Pacific (APAC) region is still of great concern for most of the consumers with 66%* of the respondents expressing deep concerns about their financial situation uncertainties, thus restricting the shoppers from spending freely on retail goods, says GlobalData, a leading data and analytics company.

Among the concerned respondent countries, the Philippines, Vietnam, and Malaysia accounted for the highest proportion of extremely concerned respondents. Insecurities about their financial situation induces the shoppers to cut down on discretionary retail spending which was expected to ease in 2021. However, India, Singapore, and Thailand recorded a dip in the concern levels compared to the previous quarter which can be attributed to the roll out of COVID-19 vaccines.

Ankita Roy, Retail Analyst at GlobalData, comments: “Sizable number of respondents are concerned about the restrictions on socializing and eating out in restaurants owing to the risk of COVID-19 infection. However, consumers are looking to return to activities of pre-pandemic life mostly in countries where restrictions are no longer in place. With widespread vaccine rollouts and regaining consumer confidence in some countries, the long-term retail outlook in the APAC region remains positive with an expected CAGR of 6.7% during 2020-25 to reach US$11.2 trillion.”

The ‘convenience store’ channel is generally more popular with the Asian and Australasian consumers who have continued to be heavily affected by the global pandemic in Q3.

Roy concludes: “Consumers prefer convenience stores over crowded hypermarkets/supermarkets, as they are smaller in size and local, to avoid contact with the virus. This suggests that convenience stores are still integrated into consumers’ shopping habits despite lowering of COVID-19 cases and increased use of online channels.

“Broadly speaking, they are more heavily used by younger consumers, who tend to live alone or buy just for themselves and shop on the go due to time constraints, so are suited to the convenience format. While online shopping of retail products has been a go-to option for consumers during the pandemic, physical store formats will certainly continue to be a favourable destination for shoppers if they adjust to changing consumer attitudes and concerns around health.”

*Data taken from GlobalData’s Q3 survey of 6,000 APAC consumers, aged 16+ conducted in early October 2021

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