3 pillars changing the future of retail in Southeast Asia

Retailers are urged to prioritize digitalisation, experiential initiatives and sustainability to remain competitive.


NEW digital interfaces, experiential retail and responsible retail are now the main factors changing the future of retail in Southeast Asia. This is according to Quan Yao Peh, senior analyst for the channel practice at Euromonitor International.

At the Retail Asia Forum at Shangri-La in Bangkok, Quan provided an overview of the current state of retail in Southeast Asia, highlighting the lasting impact of cost of living challenges on consumer sentiment.

“What is the current state of retail in Southeast Asia? At Euromonitor, we believe that retail is now in the post-pandemic era,” he said. “Cost of living challenges continue to remain top of mind for many consumers in this region.”

“This is really due to the impact of rising prices and a weak macroeconomic climate on consumers’ spending decisions and spending sentiments,” he continued.

Indonesia and Vietnam have become key retail markets, accounting together for over 50% of the region’s retail sales value.

Digitalization drive

Based on Euromonitor’s latest research, Quan presented key findings across various retail categories. It highlighted the rapid growth in modern grocery formats, driven by convenience and product variety, as well as the need for retailers to strengthen their digital capabilities to meet changing consumer preferences.

Quan also highlighted the emerging e-commerce landscape, highlighting the role of innovative technologies such as artificial intelligence and social commerce in improving the shopping experience and increasing consumer engagement.

The senior analyst also highlighted how retailers are leveraging artificial intelligence, immersive technologies and collaborative initiatives to create personalized and engaging shopping experiences.

“Consumers now expect store(s) to go beyond a simple transaction destination, but to become a place where they can engage in experiences, where they can connect with the brand and its community,” Quan said.

Integrating sustainability

Quan also emphasized the importance of responsible retail practices in making a positive impact on the environment and society. This covers various elements, including the environment, ethical sourcing and transparency.

“Based on our sustainability industry study, we believe that at this point in time, the environment continues to be the most important area influencing the sustainability priorities of businesses in this region,” he noted.

Quan said Southeast Asian retailers are integrating sustainability into their core business strategies, from ethical sourcing to community empowerment initiatives. Examples include Central Retail’s SeaVerse platform, showcasing retail innovation, as well as the Watson initiatives in the Philippines and Toko Padai in Indonesia, highlighting the growing importance of sustainability.

Looking ahead, Quan predicted continued growth in Southeast Asia’s retail sector, driven by economic expansion and e-commerce.

“Digitalization, experiences and sustainability will remain key priorities shaping the future of retail in this region,” Quan said. “We believe it’s important to act on these priorities to ensure your business stays relevant…remains consumers’ preferred shopping experience in an increasingly competitive online environment.”