Sunday, July 1, 2012

The Changing Retail Landscape

The Changing Retail Landscape

Part 01 Mobile Generation Malaysia

01 July 2012 - Business is going mobile. It is doing so fast, and it is evolving quickly as it goes along.

The mobile retail environment is a quickly changing landscape, and retailers who are quick to latch onto the latest innovations and trends in doing business with an Internet-savvy generation will stand to gain more than their slower to respond competitors.

Malaysia has a very high smartphone penetration rate. It is about 48% according to the Nielsen Digital Consumer Study 2011.

The Mobile Generation

The Mobile Generation is defined as being a generation of consumers who almost always are connected to the Internet. They have few qualms about buying online, and are smart enough to avoid most scams and traps of the Internet.

Usually, they are socially networked to one another and just as news of a good bargain are quickly spread to friends, so are news of bad customer service and fake sales.

Paypal was in Malaysia recently, and Elias Ghanem, Managing Director of Paypal Southeast Asia and India said that there is a huge competitive advantage to integrate online and mobile sales channels with the traditional brick and mortar sales channels.

[Elias Ghanem, Managing Director of Paypal Southeast Asia and India]

He adds that established brands would do well to leverage on their already considerable market presence by integrating a well-thought out online and mobile strategy to complement their existing business.

Online Commerce in Malaysia

The Nielsen Digital Consumer Study 2011 also tells us that Malaysia’s online commerce went from RM 1.8 billion in 2010 to RM 1.97 billion in 2011. That is a 9% increase year on year, and Paypal expects this figure to triple to RM 5.76 billion by 2015.

[Projected Growth of Malaysia’s online commerce. Graphics courtesy of Paypal]

What is behind such growth?

They think that it is due to lots more people in Malaysia shopping online. There were 1.6 million Malaysians shopping online in 2011. That is a huge 44% increase from 2010.

There were a number of factors given for this explosive growth.

a) New consumers joining the market and purchasing online

b) Retailers adding or improving upon their online sales presence

c) A number of International retailers marketing directly to Malaysian consumers

Breaking it down – the figures

Malaysia spent some RM 1.97 billion online in 2011.

[Malaysia’s online spend by Income bracket. Graphics courtesy of Paypal]

According to the research from Paypal and Mobile Shopping Insights 2011, middle income earners (RM 4001-8000) spent RM 819 million in 2011, the largest chunk of that online commerce market at 42%.

Next was the lower middle income group (RM2001-4000) which spent RM 521 million or 27% of the total. Together, the middle income group accounted for 69% of the spending, which indicates that online shopping is increasingly becoming an accepted part of everyday life.

Next: Part 02 Domestic Commerce & Concerns

♠ JC


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