The Asian Pacific retailing bloc is largely dominated by economic giants like China, Japan, Australia, South Korea, Chile among others. Kacker (2015) assert that the Asia-Pacific retailing bloc has transformed over time since the 1980s. This transformation is largely attributed to the influence of world economic heavyweights such the US, Europe, and Japan which are said to be heavily involved in injecting transformative ideas and concepts that have greatly contributed to the changes in the retailing styles used in the region. The transformation is largely characterized by the moving away from small shops to embrace larger and more complex retailing outlets.
Stine and Ghasemi (2017) point out that the Asian Pacific region has seen a tremendous increase in retail growth within a span of six years dating back from 2010 to late 2016, topping in the retail index. The performance within this period outmatched all other retail regions in the world. According to Stine and Ghasemi (2017), marketing strategies such as online selling particularly in China has also contributed greatly to the expansive nature of the Asia-Pacific retailing bloc.
Further, Stine and Ghasemi (2017) note that despite the upsurge in the retailing capacity in the Asian Pacific region, it is worthwhile to note the characteristics of the net retailing profits that accrue from the retailing in this region, interestingly, there is a dip in the profits. This could be attributed to the ever-increasing competition among the main players, high costs of operation, consumer turnover among other bottlenecks faced within the bloc.
Howard (2013), in her book “The changing face of retailing in the Asia Pacific” assert that the rapid growth of the retailing in Asian Pacific region should be largely connected to the entry of large organizations and the arrival of international players who have come with wider arrays of products and services and consistency in their supply which have taken the consumers with a swipe of availability of what they desire at their doorsteps or in one shop. The developments of shopping malls and modern retail outlets have made it easy for the consumers to acquire products easily and efficiently.
The rules of retailing according to Deloitte Montenegro.com (2015), are being rewritten to embrace the transformative ideology of the retail sector. The players in this sector are embracing innovation, integration, consolidation, collaboration, and automation of services and processes. Zarirah (2018) also note that retail in the Asian Pacific regions is becoming internationalized such that firms tend to diversify their portfolio abroad in order to overcome completion and to capture other market niches. Therefore, retailing along the Asian-Pacific bloc is rapidly moving far from the conventional and more traditional approach to a more dynamic, modern and complex system whose focus is efficiency and effectiveness in meeting consumer demands cheaply and timely.
Retailing in Australia
Strategies of the retail industry in Australia
Baker (2018) identifies various features of the retailing sector in Australia and what has kept the retail sectors in Australia vibrant. Baker (2018) notes that Australian retailers earlier faced a lot of uncertainty associated with consumer characteristics which as a result had thrown the sector especially the small-scale retailers to cut on their expenses, clear their inventory and offer discounts in order to make the goods move. In order to continue staying upbeat in the retail market, retailers in Australia have resorted into the localization of their businesses through opening up of many branches within the county in order to bring services and goods closer to the consumers and also to capture those virgin markets in locations which the products of the retailer have not reached.
As a means of cost-cutting and reducing the operational costs, Australian retailers do not embrace committing more human capital in order to increase service provision levels (Euromonitor.com, 2018). This is a strategy used by these retailers in order to cut on their operational costs in order to remain effective in operations and to keep competition at watch by balancing their accounts well.
Another notable strategy employed by Australian retailers to stay up front in the retailing sector is the heavy and rapid investment in e-commerce among other online forums which are vital for the market information. Apart from the installation of stores in target areas where consumers can reach out to their desired product or service, online marketing is taking center stage in most retail companies/individuals. They are closely interacting and integrating both online and offline channels of sales in order to provide a seamless experience of shopping to their clients (Moore, 2018). Social media is not left out in this pursuit. The use of Facebook, LinkedIn, Twitter among other notable social media podiums is on the rise as these have proved to be a great tool for marketing.
Globalization of businesses is also on the rise in Australia where companies get access to foreign markets for their goods and services even before the saturation of the local market. This move wades out stiff competition often felt I the local markets. This is achieved by either directly setting stores in the foreign market, getting licensing to officially operate in the foreign market or better still franchising (Baker, 2018). Retailers like Lululemon go the extra mile in embracing accountability by ensuring to deliver to the customer what they promised and if they fail, they take full responsibility for the same. This strategy wins the customer loyalty (Heffernan, 2018).
Characteristics of the retail industry in Australia
Retailing in Australia is dominated by a variety of retail outlets dealing with different products and services. Both established shops, merchandising and online forums are currently deeply rooted in Australia. As noted by Euromonitor.com (2018), the Australian retail sector is characterized by an upsurge in the use of online retail shops.
This is majorly supported by the desire to have dominance and presence across many retailing channels preferably digital presence as this offers a better base for reaching out many clients and also because consumers also have a better comparison of the prices and other characteristics of the products offered on a digital forum. A perfect example of a retailer which has invested highly in online retailing in Australia is JB Hi-Fi, a home entertainment retailer with a wide range of electronics characterized by low prices and quality customer service (Cloudways.com 2018).
Australian retail sector is also dominated with retail centers such as open stores, supermarkets and other small shopping points where customers walk in at their comfort to pick goods or to acquire a service of interest. According to Farfan (2018), the Australian retail sector is dominated by large stores and supermarkets such as Woolworths limited, Wesfarmers limited just to mention a few.
Product positioning is a very important characteristic of retailing shops in Australia, there is a trend of classification of products in the retailing stores for example supermarkets where foodstuffs are grouped together and given a specific location inside the supermarket. This makes it easy for customers to find their direction easily and to make purchases quicker so as to minimize the time customers take within the shopping center and to increase the efficiency of operation within the supermarket.
Other products such as electronics are also grouped together and given a suitable location for ease of window shopping or actual shopping for these products. Notable though in some supermarkets, for example, Coles Australia Fair, is the revolving trollies with quick sale products that customers may need but not of quite a necessity hence such products are put in trollies that are moved instantaneously around the mart for ease of spotting them by customers who may be interested in purchase (Dickson, 2018).
Department stores in Australia are engaged in offering a number of services to their clients apart from just selling the products. They purchase goods from wholesalers and resell the products to their customers without changing the nature of the product itself. They ensure good customer service provision in order to continue maintaining their customers, for example, David Jones. It is their responsibility to engage in advertising these products to their customers and some go as far as merchandising these products in order to ensure continuous sales flow. The main activity is inventory control where the retailers have to balance their sales against their stock in order to keep their inventory purchase on a check (Ibisworld.com.au, 2018).
Case study, China
Characteristics of retail in China
Chinese retail market has evolved over time from the traditional retail methods to a more modernized retail method due to ever-increasing influence from the big trade giants such as the United States and Europe. According to Majberg (2018), retailing in China has taken a whole new route towards modernization as of the influence of foreign companies that have flooded the Chinese market and are redefining retail in every front. Miller (2018) identify characteristics of the retailing sector in China as either owned by individuals or privately owned by foreign investors.
As earlier identified, Chinese retail sector borrows similarity to the Australian retail sector in a number of ways. Just like the supermarkets in Australia, China also has supermarkets which serve its customers in almost similar capacity. China has however modernized the supermarkets into the future of retail. Take for example Alibaba Supermarkets which are leading the way into the future of retail by slowly turning into Hema markets.
Hema centers of Alibaba differs from Australian supermarkets in such a way that as pointed out by Majberg (2018), have induced technology into shopping where consumers are having a whole new experience on shopping using their smartphones with an installed Hema app. The app enables customers to select items from the Hema, for example, grocery, choose whether to have the items packed for him/her to ferry home him/herself or the items are delivered to his/her home by the Hema service deliveries. It also enables consumers to choose the nature of their groceries, whether cooked or uncooked, if cooked, customers may choose to eat their foods inside the store or carry it home. This is specifically different from most Australian supermarkets which do not allow direct consumption of food inside the shopping center.
Chinese modern supermarkets also offer efficiency to their customers more than it is in Australia. Cashless shopping is quickly taking center stage in China and rapidly spreading across many retail centers. Alibaba’s Hema and most supermarkets yet to be converted into Hemas are already embracing the use of QR barcodes where shoppers using their phones with Alibaba’s Hema app scan the codes and submit their payment of goods purchased without having to walk around with cash (Majberg, 2018).
Just like in Australia, there is the rapid growth of the e-commerce as the new form of retailing embraced by both big and small retailers in the market. According to Euromonitor International (2018), Chinese retail markets have embraced Omni-channel retailing in which players tend to emphasize the use of varied channels of retailing introducing new and more modernized approaches. Chinese retail market has taken over through innovation the use of online retailing in which consumers can shop for products from the comfort of their homes and have them delivered saving consumers the hustling and bustling of having to go shopping. In China, these online shops not only offer prices and products but are also sensitive to the pricing of their products which can captivate and pull more clients to their products. They offer lucrative discounts, value addition alongside a wide range of products at one point.
As noted before, just like Australia, product positioning is also significant in Chinese retail centers. Retailers have mastered the art of positioning their products inside the retail centers to capture the attention of the consumers at a glance. In Australia, most products can be found within the shopping center positioned at different places as per the product type. Chinese superstores, supermarkets have products of the range characteristic put together for ease of collection by consumers. Notable though is products such as alcohol which is given special treatment by being put under strict supervision in order to control the purchase of such products (China Briefing, 2018). China Business Review (2018) note that unlike Australia, Chinese retail sector is fragmented and constitutes both small, medium and large retailers in different Chinese provinces depending on the income levels of the inhabitants, their purchasing power and demand for retail.
According to Fung Business Intelligence Centre (2013), Chinese department stores are characterized by more lucrative addition into the business for these stores to wade the ever-increasing competition. Retailers in China who run department stores are moving around the clock taking different initiatives for them to keep staying upbeat in business. These stores employ the use of new offering provision whose aim is to capture more consumers. Such offerings include discounts, after sales service and incentives to consumers. Some go as far as providing catering services as an after sales service to consumers and also incorporating entertainment in order to capture the attention of more clients. This is in somewhat similarity with the operations of the department stores in Australia.
The main difference between the Chinese department stores and those in Australia is the nature of availability of products under one roof divided into departments. In China, department stores are organized under one roof called a departmental organization, in this organization, there are sub-departments that deal with different nature of items with labels that customers only need to figure what they need and move to acquire it. In Australia, not much is done on the labeling of these stores, again one department may choose to have a number of product lines (Accountlearning.com, 2018).
Comparison of Retail Size in China and Australia
According to Rhim and Salman (2018), Chinese retail market is on rapid growth despite challenges of stiff competition in the retail market. The rapid growth is attributed to advancement in technology and the ability to embrace e-commerce. Retail centers in China are on the verge of going fully online using variously available initiative. Global Retail Development Index of 2014 ranked China at position two worldwide ahead of other major players like the US, Europe, and Japan, thanks to the continuous innovative strategies used by the Chinese. According to Stevens (2018), China has weathered a lot of storms as far as retail is concerned but still performing best in the sector with its e-commerce being the second best in the global retail rankings.
Stevens (2018) identify that Australia is not left out in the pursuit of better retailing terms worldwide. Australia’s retail sector is in gradual growth with the inclusion of the e-commerce initiative in most of the retail taking place. Australia according to A.T Kearney Global Retail Development Index, is ranked tenth.
Challenges facing the retail sector in China and Australia
Both China and Australia face myriads of problems that face the retailing sector. The challenges that face these two nations range from social, economic, cultural and political. Simpson (2018) identify that the bottlenecks facing the retail sector are more or less the same worldwide. Simpson (2018) further asserts that due to hard economic times, customers have become very careful and choosy with their spending deciding to have control visits to retail stores.
Cooper (2018) identifies that retail sector is dwindling in performance especially in the Asian-Pacific region because of increased operational costs such as the cost of renting and the entry of big players in the market which push other traders out of the sector. Political interference also poses a great risk to the development of the retailing sector. Hard economic times such as increasing rate of inflation in these countries make it difficult for retailers to provide affordable services.
Conclusion
In conclusion, therefore, retail as a sector in the Asia-Pacific region is on the verge of increase in performance despite the fact that there are a majority of bottlenecks that constraint this sector limiting it to achieve its full potentiality. The Global Retail Development Index has data that shows a tremendous increase in performance in most countries in the Asia-Pacific region in most products sold in the retail markets. Despite a deep in some years, there is an overall growth of the retail sector in this region, and China and Australia are not left out.
Recommendation
Cooper (2018) notes that there is an opportunity worth the embrace by retailers in most of Asia-Pacific region. There is an urgent need by retailers to understand consumer diversity and behavior. Retailers, therefore, need to collect and analyze consumer data so as to fully understand who they serve and what do they need. There is a need for retailers to align their products and services to the urgent needs of the consumer. Secondly, despite the ever-increasing competition, retailers should not shy off and exit the market simply because of larger and better players entering the market. Retailers need to realize that competition is healthy for their businesses as it tells one what the competitor is doing best and how best it can do better than the competitor.
Technological advancement is key to retail growth, development, and evolution. Alibaba in China is a prime example of a retailer harvesting the fruits of innovation. Countries in the Asia-Pacific region need to invest more on innovation in retail markets in order to continue remaining relevance even in the presence of many competitors. Witt and McKay (2018) note that it is coherent that countries in the Asia-Pacific region realize the importance of showing political will in retailing just like in China and Australia.
The Chinese government, for instance, is decentralized with the power given down to government representatives making local business operations easy and efficient for instance in licensing. Political will is also shown in the government’s support of innovation and technological advancement in every sector of the retail market.
Diversification of different retailing channels is also important for the better performance of the retail sector. The migration initiative to e-commerce is one move to diversify retail. This move will make it possible for retailers to reach out to worldwide consumers to display their products and to attract more customers both in local and international markets, a case study is Alibaba stores that have reached out to many customers in the world attracting a big base of consumers.
Reference List
Departmental Stores | Characteristics | Advantages | Disadvantages.
Baker, M. (2018). The 10 Characteristics of Highly Effective Retailers.
China Briefing News. (2018). Sales, Import, and Manufacture of Alcoholic Beverages in China – China Briefing News.
China Business Review. (2018). Understanding China’s Retail Market – China Business Review.
Cloudways.com (2018). Here Is a List of Top 20 E-commerce Sites of Australia In 2018
Cooper, R. (2018). Challenges and opportunities of retailing in 2018 – retailbiz.
Deloitte Montenegro. (2018). Global Powers of Retailing | Deloitte | Consumer Business industry reports.
Dickson, J. (2018). 50 most powerful retailers – Inside Retail.
Euromonitor.com. (2018). Retailing in Australia.
Farfan, B. (2018). Fast Facts About Australian Retailing and Largest Aussie Retailers.
Fung Business Intelligence Centre (2013). Department stores in China. [ebook] Fung Business Intelligence Centre.
Heffernan, M. (2018). Lululemon props up Aussie arm. [online] The Sydney Morning Herald.
Howard, E. ed., 2013. The changing face of retailing in the Asia Pacific. Routledge.
Ibisworld.com.au. (2018). Department Stores – Australia Industry Research Reports | IBISWorld.
International, E. (2018). Retailing in China.
Kacker, M. (2015). Internationalization of Retailing in the Asia-Pacific Region: Current Trends and Future Outlook. Developments in Marketing Science: Proceedings of the Academy of Marketing Science,
Majberg, A. (2018). The Future of Retail is Happening Right Now in China | Alizila.com.
Moore, K. (2018). Australian retail still has a long way to grow online – SmartCompany.
Rhim, H. and Salman, F. (2018). Global Retail Development Index – A.T. Kearney | Australia.
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