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3 Trends for Southeast Asia retail, according to Zalora

By Rachel Douglass


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Image: Zalora

Asia’s online fashion destination Zalora has revealed its forecasts for Southeast Asia’s retail landscape going into 2022. The company hosted a virtual trend seminar alongside the release of its Trender 2021 report, outlining key technology shifts and consumer developments it has spotted over the past year that could influence the landscape in the year to come.

The report is based on the company’s own analysis, utilising its retail intelligence and data analytics to inform on retail strategies. Intel derives from its extensive partnerships, including with the likes of Google and the Global Fashion Group (GFG), of which it is a member.

In the virtual seminar, a comprehensive presentation on notable trends in the market was followed by short presentations by a handful of the partners, including the head of industry e-commerce at Google, Jerome Hamlin, and H&M’s South Asia regional manager, Oldouz Mirzaie. Each shared their takeaways from the consumer trends of the past year and the effects they could have on retail.

On the report, Zalora’s CEO, Gunjan Soni, said in a release: “The dawn of a new era of retail is already here in Southeast Asia. As consumers become more discerning and connected, we are seeing incredible innovations happening in the retail sector that completely reimagine the shopping experience. Our flagship state-of-the-industry report helps facilitate the industry’s evolution by allowing more brands to understand the changing market and anticipate what the future holds. Our focus continues to be on consumer behaviours and how it’s evolving”

FashionUnited has highlighted three notable trends remarked on in the seminar and why each is so important for Southeast Asian retail in the foreseeable future.

Image: Zalora

The rise in digitalisation

A notable figure provided by Google stated that 40M new internet users came online in 2021, bringing the internet penetration in Southeast Asia to 75 percent. Brands turned to prioritising their online presence in regards to this shift, with Zalora reporting a 19 percent increase in new brands to the platform.

Google’s Hamlin said on the distinctive shift: “The pandemic is probably the biggest driver behind all of this.

“I think for businesses, what I am really encouraging you to think about is how to use this acceleration: by building new and lasting customer relationships. If you are able to invest in the long term and build these relationships you can really leverage that stickiness and habits that are being formed.”

An omnichannel approach is something the presenters discussed at length, noting a change in how consumers want to be communicated with and the number of brands turning to digital-led strategies that continue to remain personalised.

While the Textile and Fashion Federation (TaFF) Singapore, whose general manager, Julynn Tay, attended the seminar, turned to virtual shopping, Kenneth Tan, CEO of BeLive technology, mentioned the benefits of live commerce.

He noted: “Live commerce has produced a whole new wave of products. It follows content and trust-led discovery models that enable users to discover products through content created by people they trust. This has been happening in China for a while, and now we are seeing it throughout Southeast Asia as well.”

Not only does the strategy fall in line with the digitalisation of retail, but it also corresponds with a consumer desire to remain personal, with streamers knowing viewers by name and developing a new sense of authenticity.

“High engagement, high turnover rates,” Tan added.

Pandemic-related lifestyle changes

Naturally, Southeast Asia has also been a witness to lifestyle changes provoked by the pandemic and its effects on consumer behaviour and retail. Though Zalora reports a more positive outlook over the next year, it still suggested that a 2022 overlap is to be expected.

Soni affirmed: “The outlook is encouraging, however, in the near term the world continues to be somewhat unpredictable. There is still the pandemic battle, which we expect will have some degree of continuation, but consumers have had a taste of the light at the end of the tunnel.”

This positivity was reflected in new consumer shopping habits, including what the platform refers to as “Lockdown shopping”. It reported the average basket size on its site increased from 77 dollars pre-covid to 85 dollars in periods of low alert and 96 dollars during the high alert.

Furthermore, it found consumers to be investing more in casualwear and focusing on their fitness. Both men and women, throughout the market, spent more on sportswear in comparison to dressier categories.

However, travel also made its way back into consumer lanes, with the announcement of lessened restrictions between some countries. Following Singapore’s Vaccinate Travel Lane pilot with Germany, for example, Zalora reported a 275 percent increase in the search terms for ‘winter wear’.

Sustainability as an integration

Like many other global markets, Southeast Asia also turned its attention towards sustainability during the past year, following the continued rise in the importance of eco-friendly solutions.

Searches related to sustainability remained stable on Zalora, from 2020 to 2021, with Millennials making up 64 percent of the searches followed by Gen X at 18 percent. Gen Z, on the other hand, only made up 14 percent of the total.

The sustainability manager of H&M Southeast Asia, Marian Dang, took on this subject area, expressing that consumers are not only attaching value to a product or service, but they also want to identify themselves within a brand and expect that brand to act more responsibly towards the environment.

Dang, however, had noticed a discrepancy, citing: “We still see a bit of a gap between the attitudes and behaviour, so there is still a gap between what they say and how they are behaving towards consumption. This is where brands and companies need to come in to close the gap. Brands need to bring customers with them on the journey towards sustainable fashion.”

Recognising H&M’s unbeatable network, Dang gave suggestions on how other brands could integrate this strategy into their own operations. Her main points centred around raising awareness and educating customers on materials, as well as making sustainable buying options more accessible.

She added: “The intent needs to be loud and clear. Sustainability isn’t just an activation, it needs to be an integration of business models.”