What Challenges are Retail Brands Facing in APAC in 2020?

2018 was a year of recovery for the retail industry, and in general, the growth rate of retailers in 2019 has been faster than that of the market economy. According to the IMF’s latest World Economic Outlook, 2019 GDP growth rate was 3.4%, while the growth rate of retailers was 4.1%. So what is in store for 2020? With the overall economic slowdown and increasing uncertainties, the rise of omni-channel retail and the trend of data-driven decision-making, the retail industry faces many challenges, but also significant opportunities.

“Data is a virtual thing. Turning data into insights and finding the causes behind changes to performance to allow us to improve – that is our focus,” says Vincent Cheng, Commercial Director of Barilla, the world’s largest producer of pasta and one of Italy’s top brands. “Execution is always a challenge, and the market is always changing so I need a good partner to provide complete and transparent data so that we can respond quickly to the market.” 

In the process of creating demand and upgrading their use of the digital ecosystem, leading brands are facing significant challenges for 2020. 

Watch the video to learn about the key 2020 challenges of Johnson & Johnson, Barilla, L’Oréal, Kraft Heinz and Mead Johnson.

Retail brands face significant challenges including:

1.    The increasing cost of channel development and reaching customers

“Increasing our visibility across channels In China is becoming difficult because we are working in a category that is small and are trying to not only increase our share, but also grow the size of the whole cake, so our share of sales is immersed in the growing category,” says Gunes Karababa, Vice President of Barilla, the world’s largest producer of pasta and one of Italy’s top brands. He added: “The cost of advertising and reaching customers is increasing year by year, and we see this as a key challenge.” 

2.    Wide application of social ecommerce

With the continuous development of Internet technology and complex dynamics of consumer demand, the sharing economy is getting more and more popular which is leading to an increasing number of innovative social e-commerce marketing models.

Irene Chen, Digital Project Manager from L’Oréal, says: “The most important change is that we at L’Oréal are increasingly focusing on social commerce. For example, we need to know how to invest in different social platforms, such as WeChat in China, and how to improve product availability as well to motivate consumers to make the final purchase.”

Aron Zeng, Ecommerce manager from Johnson & Johnson, agrees, commenting, “The rise of social commerce changes the independent platform operation model.” 

3.    Digital transformation to improve operational efficiency

Tanya Tan, Ecommerce Marketing Head of Kraft Heinz, says frankly: “E-commerce is already at a mature stage, and the competition is fierce. How to improve efficiency is the most critical challenge.” Brands need to focus on effective promotions in the e-commerce process. “There will be changes in the promotion rules of e-commerce platforms, which is a great challenge for the brand side,” she says. “It is necessary to ensure that promotions conform to the company's policies, and also to maximize the use of platform resources. Given this pressure, the question is how to better manage and use the digital shelf to improve internal efficiency and resource allocation of the company. These are challenges we need to face.”

Brands need to accelerate execution of their digital strategy, and leverage big data to understand consumers better and generate more insights to improve business effectiveness and conversion rates.

Aaron Zeng, e-Business Manager from Johnson & Johnson, says the company’s cooperation with Edge by Ascential has become fundamentally important: “Through Edge and their massive amount of data, we generate insights and business opportunities that provide our company with valuable advice and guidance.” 

4.    Reshape retail value and enhance the consumer experience

A positive retail experience needs to inspire shoppers. Efficient operational rules, smart classifications, faster response from supply chains and more real-time execution will provide shoppers with online and offline shopping experiences that are seamlessly integrated.

Aaron Zeng emphasizes: “The online and offline shopping experiences of consumers, including promotional activity experience, are very important to us.” 

Terry Wang, Data Insights Manager from Mead Johnson, says: “We need product innovation to provide better service experiences and meet the needs of consumers. Also we need to upgrade our products to obtain more added value and profit with the same sales volume.”

Jyoti Jain, Head of Consumer & Business Intelligence, Johnson & Johnson APAC, adds. “A key priority for us in 2020 is consumer centricity. With a deep understanding of the consumer, we will be in a position to bring the most impactful products and brands to our consumers.” 

The article and video were produced prior the outbreak of COVID-19 (Coronavirus). Next week, we’ll share what brands can do to address the changes of consumer behaviour due to Coronavirus. Fill out the form now to If you wish to receive the article.