Asia Pacific Update: November 12
In today’s edition, we examine the fall and rise of the retail industry, the increasing preference toward online shopping due to the Covid-19 restrictions and the increase of sales in suburban malls vs their urban counterparts.
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Recovery Spotlight: Food Production
Physical retail takes a hit and the rise of suburbia.
During the lockdowns across Southeast Asia, malls in the region saw a 90 percent drop in footfall.
As a result, in Singapore, store closures hit a 10-month high in September, according to the Accounting and Corporate Regulatory Authority. The city-state mourned the closure of department store stalwart Robinsons after 162 years of operation after its owners decided to liquidate the stores citing shifting consumer tastes and cost pressures. Parkinson Retail Asia’s auditor EY has flagged that there is uncertainty about the retail group’s ability to operate its stores across Malaysia, Vietnam, Myanmar, Cambodia and Indonesia.
Suburban malls are better positioned to weather the sectoral hit by the pandemic. Malls in Singapore’s Orchard Road shopping belt continue to remain subdued as borders remain shut. In contrast, neighbourhood malls have seen sales recover to 97 per cent of the previous year’s levels according to mall operator CapitaLand.
In Australia, neighbourhood-based mall landlord SCA Property shared its rent collection rates bounced back close to pre-COVID-19 levels. This is a shift from previous forecasts made by the company in August warning of losses. Malaysia’s CIMB Group also commented that the country’s neighbourhood malls are likely to be more resilient to the retail sector’s downturn than downtown ones.
Online sales on the rise
Before the pandemic, only 9 per cent of global shoppers regularly shopped online, with this number growing to 44% by May. South Korea’s retail sector grew 8.5 per cent in September, with sales from e-commerce platforms growing 20% year-on-year. According to a Nielsen survey, South Korean shoppers were most interested in value for their money and fast “within six-hour” delivery timetables when shopping online.
Vietnam’s retail sector is also recovering, as recruitment demand in the industry has grown between 40 to 50 per cent between February and July as e-commerce sales continue to rise. A report by the Vietnam E-Commerce Association revealed that the growth rate of the e-commerce market in 2020 would amount to 30 percent.
Japanese retailers Muji and Uniqlo are expecting record profits in FY2021 as stay-at-home consumers in Asia have turned to their affordable every day, casual clothes amid the pandemic. Uniqlo highlighted that while revenue in China, Taiwan and Hong Kong fell 9.3 per cent, e-commerce sales jumped 70 per cent in Singapore, Malaysia, Thailand and Australia. Muji expects online sales in Japan, which account for 11.5 per cent of domestic revenue, to rise 60 per cent from a year earlier.
Southeast Asia’s fastest-growing internet economy Indonesia has been able to attract investments in e-commerce from Google, Temasek, and Microsoft. Examples include e-commerce giant Tokopedia which received US$350 million from Google and Temasek, while Microsoft has agreed to join a U$100 million investment in the Indonesian online marketplace PT Bukalapak.com.
E-commerce platforms in South East Asia continue the trend of using double-digit-dates promotional events to increase sales. Malaysia’s 7.7 events generated an increase of 132 per cent over the June, Singapore’s Shopee had reported a strong performance for its 9.9 sales event – with 700,000 items sold in a single minute at its peak. The 11.11 promotional events across the region are likely to perform well amid social distancing and consumers adoption of online shopping.
“Freestanding and neighbourhood stores continue to outperform with sales growth in major shopping malls and city locations still impacted by customer preferences to shop locally,” notes Australian Metro Group.
Media analysis of stories covering Australia, Cambodia, Hong Kong SAR, Japan, Malaysia, Macau, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam from 11 October to 11 November 2020.
This briefing was prepared by the Weber Shandwick Insight and Intelligence team in Singapore. If you feel a specialised briefing and analysis bulletin could benefit your team, please get in touch: firstname.lastname@example.org.
The Work of COVID-19: Absolut: Drink Responsibly. #VoteResponsibly
While most people have the best intentions to vote, in reality, younger Americans often don’t follow through on their good intentions. A recent poll from NextGen found that 71% of young Americans stated that they would “definitely” vote in the upcoming election however data showed that in the last presidential election, while there was the intent, only 46% showed up to cast their votes.
IDEA Absolut is a brand with a long tradition of sparking cultural conversation and advocating for a more open and inclusive world. Earlier this year the brand launched a “Responsibly” platform designed to tackle the many aspects of responsibility and how it intersects with the most important, culturally relevant issues of the day. #SexResponsibly was the first articulation of this campaign and we are now continuing the momentum with our new non-partisan #VoteResponsibly campaign featuring the lead message of Vote First, Drink Second.
In conjunction with the launch of the creative, Pernod Ricard USA’s CEO also announced they would be closing their offices on November 3rd to ensure employees have the time and flexibility to cast their vote.
Weber Shandwick was on tap to spearhead the campaign’s narrative and overarching strategy, as well as the program’s earned media approach for the launch. To-date the campaign has seen 325 total mentions with 48 earned stories and 14.7M impressions.
The work continues with soon-to-be-announced creative consumer experiences and partnerships that ladder back to the “Vote First. Drink Second’ messaging.
About COVID-19 Recovery Report:
- The content of this news bulletin is a summary of publicly available news articles on events and developments related to COVID-19.
- The views and opinions reflected by these headlines do not necessarily represent those of Weber Shandwick.