Euromonitor International’s Shopper Reinvented megatrend explores how consumers around the world are increasingly gravitating towards brands, retailers, and hospitality operators that can credibly offer a shopping experience based around the following six pillars: value for money, experiential shopping, instant gratification, personalisation, seamless checkout and convenient last mile fulfilment. Although Shopper Reinvented cuts across almost all service industries, from consumer foodservice to travel, its impact is most evident in the retail sector. As a result, as the vast Asia Pacific region emerges as the global retail sector’s new centre of gravity, the forces powering the Shopper Reinvented megatrend are revolutionising the retail space within the region.
Asia Pacific increasingly powers the world’s retail sales growth
Thanks to a rising middle class, rapid urbanisation and a striking increase in internet connectivity in recent years, Asia Pacific consumers are becoming more affluent, powering the economy of the region even as much of the rest of the world struggles with inflation and economic malaise. Demographic and economic shifts have also helped shape Asia Pacific into the world’s laboratory of retail innovation, particularly in terms of e-commerce and mobile e-commerce (m-commerce). Thanks to these tailwinds, Asia Pacific retail sales are expected to grow by 24% in constant terms (ie after stripping out the impact of inflation) from 2023 to 2028, accounting for a whopping 57% of total global retail sales growth over that span.
Thanks to this unprecedented retail sales growth, the Shopper Reinvented megatrend is particularly important in Asia Pacific.
From 2023 to 2028, per capita consumer spending driven by the Shopper Reinvented megatrend in Asia Pacific will increase at a compound annual growth rate (CAGR) of 11%
Source: Euromonitor International Megatrends Quantification Model, October 2024
This would make the Shopper Reinvented megatrend the most impactful of any of the megatrends quantified by Euromonitor International in Asia Pacific over the next five years.
With the Shopper Reinvented megatrend expected to have such a substantial impact across Asia Pacific, it follows that four of the 10 countries globally where the megatrend is projected to have the biggest effect on per capita consumer spending between 2023 and 2028 are located there. It is no coincidence that these four markets – Indonesia, Vietnam, India and the Philippines – all count themselves amongst the young, dynamic emerging economies of South and Southeast Asia, which are fast becoming attractive destinations for retailers and brands looking for greater exposure to high-growth markets.
Indonesia, the world’s fourth most populous country and the most important retail market in Southeast Asia, leads all countries globally in terms of the expected impact of the Shopper Reinvented megatrend. Euromonitor International forecasts that per capita consumer spending driven by the Shopper Reinvented megatrend in the country will increase at a CAGR of 19% from 2023 to 2028.
In Indonesia, consumers have historically gravitated towards value and convenience in the retail space. Three of the core pillars of the Shopper Reinvented megatrend – namely, value for money, instant gratification, and convenient last mile – are intrinsically tied to these concepts, so this makes Indonesia a particularly relevant market. This helps explain why quick commerce services have found fertile ground in the country. Quick commerce services offer delivery within 30 minutes or less on online orders sourced from their own product inventories. In the West, the quick commerce model boomed during the pandemic years but has since collapsed due to a variety of factors – including a return to pre-pandemic shopping behaviours, the drying up of venture capital, and increasing consumer reluctance to pay delivery fees as high inflation impacted consumers’ pocketbooks. As in many other emerging markets, however, quick commerce sales have continued to boom in Indonesia, as the convenience provided by the service remains a major draw to the fast-growing middle classes of Indonesia’s gridlocked cities. As a result, quick commerce players like Indonesia-based GoTo’s GoMart and Singapore-based Grab’s GrabMart are thriving, with both services benefiting significantly from the rapid rise of connectivity across the country.
Fom 2013 to 2023, the rate of e-commerce penetration in Indonesian retail grew from just 1% to 31% – one of the highest rates of any country in the world
Source: Euromonitor International Megatrends Quantification Model, October 2024
Thanks to the rise of the urban middle class, experiential retail is also beginning to gain traction in Indonesia, especially in the capital of Jakarta. For example, in May 2023, Indonesian retailer Star Maju Sentosa opened its first Rambla super department store in the city. Providing a unique shopping experience, the store offers an array of products, from apparel to groceries, and features a coffee shop serving 46 local varieties. With an eye to the e-commerce boom, the new store also integrates innovative, app-based shopping options, such as “drop and pick”, which allows customers to leave items with a cashier and pay and pick up later, and “scan and shop”, which lets customers scan their purchases as they shop. With its mix of offline and online shopping, the Rambla store is an experiential concept clearly designed to appeal to Jakarta’s fast-growing, increasingly connected middle class. Other retailers in Jakarta are expected to launch similar concepts geared towards the same demographic.
For a detailed exploration of the growing importance of Indonesia and the other leading markets of Asia Pacific in the global retail space, read our strategy briefing, Asia Pacific: Retail’s New Centre of Gravity. Additionally, read our strategy briefing, Megatrends: Shopper Reinvented – Impact on Consumer Goods and Services Categories, for further analysis of how shoppers are reinventing global commerce across goods and services categories.