Due to COVID-19 induced economic uncertainty, the spending behavior of the Asia-Pacific (APAC) customers has transformed. While the retail sales in the region are anticipated to grow at a compound annual growth rate (CAGR) of 6.7%, online sales are projected to grow at a 14.4% CAGR during 2020-25, estimates GlobalData, a leading data and analytics company.

Online retailers/marketplaces witnessed huge demand during COVID-19. However, despite several advantages, these retailers are still striving to overcome their primary hurdle – last-mile delivery. With consumers’ three core primary aspects: the cost of delivery, the speed of delivery, and the flexibility of both, retailers are trying to overcome logistics’ complications, issues with third-party delivery partners, and a range of required data analytics tools to make delivery as efficient as possible.

Suresh Sunkara, Retail Analyst at GlobalData, comments: “With the growing demand for labor in delivery and logistics, retailers must focus more on expanding their geographical coverage to bring down logistics expenses and improve their margins in the long-term. Retailers must increase the use of AI and data analytics-based logistics solution which will attract skill sets relevant for automated vehicles, drones, and robots to fulfil orders to meet high consumer expectations.”

There is a big push for social media shopping as customers sought digital mediums for entertainment. GlobalData believes this channel of shopping is here to stay as social media has become an integral part of customer lives.

Sunkara continues: “Retailers should continue coming up with innovative ways for customers’ online engagement as the digital medium has become the easiest option. For instance, bans on social gatherings and restrictions on international travel led prominent fashion shows to go online. These innovative methods have uncovered new ways of operating and will affect further displays and promotional activities as these digital transformations have the potential to reach and influence a wider audience.”

COVID-19 has put a dent on all formats of retail and one such evident outcome of this pandemic is a change in consumer loyalty. Even consumers, who were earlier loyal and particular about their brand preferences, have switched. The decline in customer loyalty is a result of want for convenience, and ease of shopping above all else.

Sunkara concludes: “On the back of rapid urbanization, cheaper connectivity, growing investments in digital space, and strong domestic demand, the online retail market in the APAC, particularly in China, Japan, and India, will grow significantly as global brands expand into the region. Supermarkets, home improvement stores and even local convenience stores are venturing into the digital space and providing digital add-ons like click-and-collect, contactless payments, home delivery, launching mobile applications to ease the shopping process and attract new shoppers.”