"The following article is the second part following the piece- ‘Exploring the Future of Australian Businesses in Asia - I"
Under the initiative, 'Together We Can', The Nora Network organised a panel discussion debating the risks and opportunities that await Australian Businesses in Asia. This blog is the second part of the series focussing on insights on the Australian retailers' need to research, build a strategy and prepare for a post-pandemic era by planning for the future.
In order to grow and thrive in a post-pandemic era, Australian businesses must analyse the risks and opportunities that await them in Asia. The eCommerce scenario is taking a remarkable shift globally. The need for essential items has increased drastically and with a disrupted global supply chain, the eCommerce industry is navigating through these changes by strategizing for the post-pandemic era.
Australian Businesses have immense opportunity for growth at their disposal when it comes to South-east Asian markets. In order to sustain and grow in these markets, it is crucial to understand the opportunities and risks that these new complexities of Asia hold for Australian Retail.
South-east Asian markets hold ample opportunities for Australian Businesses in the coming era. In order to make the most of this immense opportunity, it is crucial to understand the risks and opportunities going forward. Strategic growth is possible if the following is kept in mind going forward:
In markets such as India, where there are over 550 million Internet Users, over 400 million are Social Media Users and over 150 million people shop online, the opportunities for growth are immense. In a post-Covid world, these numbers will only increase. So, the immediate opportunity for Australian companies is eCommerce. However, it is crucial for businesses and brands that are starting out in Asia to maintain communication with their customers through Social Media Platforms. This will lead to brand related value creation in the minds of the customers and shall benefit in the coming months.
Covid-19 has transformed the eCommerce mindset for both - retailers as well as customers.Talking about opportunities for Australian Retailers, according to a reputed study, online sales have gone up by 43% for FMCG segments only in Singapore during the lockdown days. This is a lot more than the Chinese New Year period. This means that there is definitely a segment that has an online presence but there is also a segment who was not online as a consumer before, and has also started exploring eCommerce. While businesses are moving from offline to online, a lot of consumers are also exploring the online space so they can get all essentials.
The Asia Pacific is home to 60% of the youth population of the world. This is a huge opportunity for businesses to tap on. There is a need to educate each and every relevant consumer about the products these businesses offer. There is a lot of demand for health supplements from Australia in these markets. A research conducted by ADP, shows that the initial projection was to grow at 5.5% in the year 2020 in the Asian region, but it has dropped to 2.2%, given the situation. However, it is said to bounce back to 6.1% or 6.2% in 2021 and now, businesses have 6 months to bounce back from it so and for that, they need to make sure that they:
Have better technology and better systems that help the optimise their efforts
Use technology to understand different countries, cultures, demographics, etc.
Local businesses, due to Covid-19, have moved online. Retailers should be prepared for a lot of local players who are now involved in eCommerce. This will now divide eCommerce market spaces into two segments -
Local Domestic eCommerce.
More and more small pockets will emerge across suppliers, distributors and consumers. Domestic eCommerce will grow faster and cross-border retailers will take some time to come up again.
The need for essential items has definitely increased but this leads to a bigger question - is there a shift in the categories that businesses should now focus on? Categories like health supplements, beauty products and essential items are high in demand. As people work from home, electronics have also become essential. These are the segments that have seen a remarkable lift in demand.
Apart from health supplements and beauty products, there is also a high demand for indoor workout apparel and equipment, digital toys, electronic accessories, etc. People are also exploring products that help them focus on hobbies like craft and painting as they stay home in lockdown.
Australian retailers need to focus on the local demand. Australia was a webstore market and is now catching up on eCommerce marketplaces so they need to show their presence wherever they can, in multiple opportunities at marketplaces and various Social Media platforms. Businesses can use this time to figure out how to use new technology to help them take off into the new space today.
For businesses who want to grow and expand, it is tempting to overlook the risks and take the leap into Asian markets. It is crucial to stay relevant. Utilise this time to study now and figure out what needs to be executed. Yet, it is advisable to stay relevant and expand in a local area and then look for growth and export strategies.
Analysing the sudden shift in the lifestyle of every individual across the globe, one would wonder about the future of physical, traditional stores and shops. Where, in the post-pandemic era, do brick and mortar stores fit in and do they have a future?
It is difficult to have an accurate answer to this question. Looking at the current situation, however, one can say that both offline and online stores will coexist and brands and retailers will have to come up with strategies that are built when one learns from traditional practices and implements a balance between their online shops and offline ones. It is crucial to not see these two aspects as opposites but as two sides of the same coin.
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