LONDON — Euromonitor released its annual top 100 retailers in Asia ranking on Thursday.
China’s Pinduoduo, an interactive e-commerce platform founded in 2015 with a focus on value-driven consumers, rose to number seven this year from 20 in the 2019 ranking. Its estimated value sales doubled from $15.7 billion to $38.6 billion in a year, intensifying competition with incumbents Alibaba and JD.com for its increasingly popular team purchase model.
It means that by sharing Pinduoduo’s product information on social media platforms, such as WeChat, users can invite their friends to form a shopping team to get a lower price for their purchase. The “a cross between Costco and Disneyland “mechanism offers a more interactive and entertaining shopping experience. Coupled with other incentives such as cashback, coupon, lottery and free products, Pinduoduo manages to acquire users at a very low cost and soon became a viral sensation in the country.
The company filed for IPO in July 2018, and now it has a market capitalization of $69.46 billion, $5.19 billion more than JD.com, China’s second-largest e-commerce player.
The rest of the ranking remains largely the same. Alibaba and JD.com retained their leading position on the list, followed by Japan’s Seven & I Holdings, AEON Group, China’s Suning, Amazon, Pinduoduo, Walmart, Korea’s Lotte and Shinsegae.
The report pointed out that China’s future is “in the massively burgeoning rural e-commerce.” As a result, retailers are shifting their attention to the rural population with a rising disposable income and an untapped older demographic, which Pinduoduo tapped into from the very beginning, when Alibaba and JD.com were courting the affluent urban consumers.
In Hong Kong, retailers of luxury goods, consumer electronics and beauty products, including Chow Tai Fook, Luk Fook, Sa Sa, Chow Sang Sang, and Lane Crawford, saw a drop in value sales in 2019 as local consumers settled for more economic options rather than premium ones. Hong Kong’s low e-commerce penetration within its retailing industry is another reason why retailers struggle to keep with, the report said.
Japan saw a continued stagnation in retail, with growth constrained by the contraction and aging of the population. Amazon made it to top 3 in the market this year, as convenient stores franchise FamilyMart saw a dip in 2019 sales.
Coupang, the largest online retailer in South Korea also doubled its revenue in 2019 and ranked number 3 in the country. “Many online players are actively promoting their mobile channels by providing mobile-only discount coupons and many promotional events, so the importance of mobile commerce is likely to rise over the forecast period,” the report pointed out.
India’s retail landscape remains the same. It is the only market where foreign players like Walmart and Amazon dominate.
Seven & I Holdings, the operator of the 7-Eleven convenience store chain, remains the largest retailer in Southeast Asia. “The company witnessed strong growth as consumers are shifting their purchases from large format supermarkets to small format conveniences stores, especially in cities faced with traffic jams like Bangkok, Manila, Jakarta and Kuala Lumpur,” said the report.
The report also offered an outlook on Asia Pacific’s retailing industry on the back of the coronavirus pandemic.
“Retailers are and will likely be facing difficult questions in 2020 and 2021 about how best to serve customers, but some players are faring better than others,” the report said: “Given that the outbreak originated in China and has since been largely contained, China can serve as a harbinger of things to come regarding the potential impact in other Asian markets.”
For example, Alibaba offered products that would enable retailers to rapidly launch an e-commerce platform. It reported that such solutions enabled companies to pivot to an omnichannel strategy within five days. In general, the Chinese government’s figures for the peak of the pandemic in January and February show that retail sales were down 20.5 percent with online sales up 3 percent.
Contactless delivery of goods and partnership with delivery fulfillment players are innovative ways retailers in Asia are adapting to, due to social distancing measures in the region. In China, JD.com ramped up the deployment of robots for delivery.
“Retailers with a stronger digital presence prior to the outbreak are likely to fare better as consumers lean more into that channel. Concepts like last-mile delivery, omnichannel and click-and-collect that have been accelerated by the pandemic are likely to stay even afterward and the bottom line is that technology is here to stay,” the report concluded.
Here are the top 10 companies with retailing in Asia 2020, based on estimated value sales in 2019.
1 Alibaba Group Holding Ltd., $317.17 billion
2 JD.com Inc., $215.61 billion
3 Seven & I Holdings Co Ltd., $80.99 billion
4 AEON Group, $69.31 billion
5 Suning.com Co Ltd., $47.15 billion
6 Amazon.com Inc., $38.99 billion
7 Pinduoduo Inc., $38.60 billion
8 Walmart Inc., $32.95 billion
9 Lotte Group, $25.53 billion
10 Shinsegae Co. Ltd., $24.97 billion