Asia convenience channel one to watch, IGD
The top ten Asian convenience retailers are set to grow 6.6% a year to 2022 by $5.1 trillion, according to IGD. It anticipates that convenience will be the fastest growing bricks and mortar channel in Asia over the next five years, resulting from both retailers expanding their networks and consumers changing their shopping habits.
Charles Chan, Senior Retail Analyst at IGD Asia, says: “The Asia convenience channel is definitely one to watch over the next five years with the strong growth expected for c-store retailers. Indonesia in particular will continue to stand out as the fastest growing retailer country and the increasing number of single and two-person households is driving the growth of South Korean retailers, increasing growth of smaller formats. This reflects consumer behaviour of purchasing smaller portions and pack sizes along with ready-to-eat solutions.”
Asia’s large and congested cities, growing young and increasingly affluent populations are ideal incubators for proximity retailing – however, formats and retailers are emerging in many forms, as identified by IGD’s four main proximity store formats in the region: CVS, forecourts, neighbourhood retailers and 1k supermarkets.
“CVS and neighbourhood convenience are the most widely adopted models currently, with both specialists and multi-channel retailers operating formats under these types,” says Chan. “1k supermarkets are a growing trend, particularly in urban locations where hypermarket growth is challenging or space for new stores is limited – these stores serve limited catchment areas and have high footfall. Although the model we’ve outlined provides a nice way to segment customers, inevitably elements of each type do appear in other models, resulting in a blurring of store types.”