1. Retail is set to undergo transformation following consumers evolving shopping patterns/preferences…
Consumers have evolved over the years and Digital has become a strong contributor to retail sales. Additionally, while offline retail accounts for the majority of retail sales, digital channels currently influence the majority of the purchase decisions, both offline & online. Consumers are also looking for more curated experiences and have shown interest in many indigenous brands that have strong resonance with them, their beliefs and ideologies. D2C brands, Super Verticals, Omni Channel etc are models that have come into existence following these changing consumer trends. The other key consumer demand is for fast delivery which is what many players are looking to cater to in their “Quick Commerce” models with instant delivery services.
SEA e-tailing GMV, USD Bn, 2020-2025
2. …and Vertical (and Super Vertical) play is imminent in the SEA region as evolved consumers look for more curated product/service offerings
There are different stages to a consumer’s life cycle, that are unique to each category of Consumers. We have divided the consumers into three categories. Beginning with the Early Adopters who are the trendsetters for online shopping, followed by the convenience seekers who started shopping online post reviews from their friends and family, and finally the Aspirants who were late to the club because of limited means to use online services. The early adopters account for a significant portion of online shoppers currently (30-35%) and these cohorts of customers would greatly appreciate specialised experiences in key product categories.
Consumer archetype and evolution mapping
3. Some segments to watch out for in Vertical play
Horizontal eCommerce players are very strong in the Southeast Asian region. However, we do believe that there is an opportunity for vertical players to arise as well. There are certain Niches that could be targetted within verticals which we term as “Super Verticals” where Horizontals would not be able to provide the same level of product and service experience due to their category-wide play.
Note: This is not an exhaustive list.