ALEXANDRIA, Va.—Fewer than 5% of consumers in Asia Pacific shop online only, as the future of the brick-and-mortar store appears bright, reports Retail Asia.
According to a CBRE retail survey, more than 71% of retailers in Asia Pacific plan to expand or add new stores in 2023, and nearly half of the retailers in the region expect a portion of online spending to be shifted to physical retail. Forty-two percent of retailers believe that foot traffic in physical locations will return to pre-pandemic levels.
“One very important fact is that fewer than 5% of consumers purely shop online. There is a huge range of hybrid shoppers, who have different shopping behavior,” Ada Choi, CBRE’s head for occupier research and intelligence and management in APAC, told Retail Asia. “This is also a challenge for the brands that have to cater to different shoppers’ behavior switching between online and offline and be able to address those issues.”
The survey also found that 66% of retailers project that it would be costly to operate online businesses this year. Online retail platforms are becoming more expensive to operate due to higher transportation costs, supply chain disruptions and labor shortages, and Google also upped its cost-per-click fee by 15% in 2021, which was particularly detrimental to smaller retailers, according to Retail Asia.
Younger people also are more likely to shop at physical locations, and 61% of all surveyed shoppers in the Asia-Pacific region prefer to see products in the store before ordering online. This could be due to the more condensed living environment in the Asia Pacific, said Choi. This is also higher than in Europe and the Americas, which is additional proof that physical stores are here to stay, she said.
“It is easier for us to go to the shopping centers and take a look at the product … The reason for going to an offline store is always about expertise, the experience … and [because] they need to feel the product,” Choi said.
“I think this also makes it very important for the retailers to continue to optimize their sales network and be able to assess their consumers in different parts of the market,” she added.
Overall, the survey projected a “largely flat” investment volume in Asia Pacific during the year. “There are quite a lot of uncertainties. For example, the volatility in the financial markets, and the concerns about the banking sector. This will also affect the investment sentiment as a whole and therefore also the retail investment,” said Choi.