Asia’s online fashion destination Zalora released its 2022 retail landscape forecasts. A virtual trend seminar was held by the company alongside the publication of Trender 2021, which highlighted key technological shifts and consumer developments that it had spotted in the past year and could impact the landscape in the coming year.
This report was compiled by Intel based on its own analysis. It uses data analytics and retail intelligence to help inform retail strategies. Intel’s extensive partnerships include Google and the Global Fashion Group (GFG), which it is a member.
A comprehensive presentation was given on the market’s top trends, followed by short presentations from a few of the partners. Oldouz Mirzaie, H&M’s South Asia region manager, gave a brief presentation. Each partner shared their insights on the top consumer trends in the past year, and how they might impact retail.
Gunjan Soni (Zalora CEO) stated in a press release that the dawn of a new age in retail is already in Southeast Asia. “We are witnessing incredible innovations in the retail sector as consumers become more connected and discerning. 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 remains on consumer behavior and how it’s changing”
We highlighted three trends that were noted in the seminar, and why they are so important to Southeast Asian retail in future.
Digitalization is on the rise
Google provided a notable number, reporting that 40M internet users were added in 2021. This brings the internet penetration to Southeast Asia at 75 percent. This shift has led brands to prioritize their online presence. Zalora reported a 19% increase in brand registrations.
Google’s Hamlin stated on the distinctive shift that “The pandemic was probably the greatest driver behind all this.”
“I believe that businesses should think about how they can use acceleration. This is by creating new customer relationships. You can leverage the stickiness and habits created by investing in the long-term and building these relationships if you’re able to do so.”
The presenters talked about an omnichannel approach. They noted a shift in consumer communication preferences and the increasing use of digital-led strategies by brands to keep their customers personalised.
Julynn Tay, general manager of TaFF Singapore, was present at the seminar. Kenneth Tan, CEO and founder of BeLive technology, spoke about the benefits of live commerce. He said, “Live commerce has created a whole new wave in products. It is based on trust-led discovery models and content that allow users to find products by trusting content. This is what has been going on in China for some time, and we now see it all over Southeast Asia.”
The strategy is in line with digitalization of retail. It also corresponds to a consumer’s desire to stay personal. Streamers know viewers by name, and develop a sense of authenticity.
Tan said, “High engagement, high turnover rate.”
Lifestyle changes that are related to a pandemic
The pandemic, along with its effects on retail and consumer behavior, has seen a significant impact on the lifestyles of Southeast Asia. Although Zalora reported a more optimistic outlook for the next year it suggested that there will be a 2022 overlap.
Soni stated that while the outlook was positive, the world’s future is still uncertain. The pandemic fight is not over, and we expect it to continue, but consumers have seen the light at the end.
This positive attitude was reflected in new shopping habits by consumers, which the platform calls “Lockdown shopping”. According to the platform, the average basket size increased from 77 USD pre-covid up to 85 dollars in low alert periods and 96 dollars when it was high alert.
It also found that consumers are investing more in casualwear, and focusing more on their health. In comparison to the dressier categories, sportswear was more popular among both men and women.
Travel also found its way back into consumer channels with the announcements of lower restrictions between certain countries. For example, the pilot Singapore’s Vaccinate Travel Lane pilot was partnered with Germany. Zalora reported a 275 per cent increase in searches for ‘winterwear’ after reporting a 275percent increase in search terms.
Integration and sustainability
As with many global markets, Southeast Asia has also been focusing on sustainability in the last year due to the increasing importance of eco-friendly solutions.
From 2020 to 2021, Zalora saw sustainability searches remain stable. Millennials accounted for 64 percent of all searches, followed by Gen X, which accounted for 18 percent. Gen Z, however, made up only 14 percent.
Marian Dang, H&M Southeast Asia sustainability manager, addressed this topic. She stated that customers not only attach value to products or services, but also want to identify with a brand and expect the brand to be more responsible towards the environment.
Dang however noticed a discrepancy and stated: “We still notice a little gap between their attitudes and behaviours, so there is still an inconsistency between what they are saying and how they behave towards consumption. Brands and companies are needed to bridge the gap. Customers must be accompanied by brands on their journey to sustainable fashion.”
Dang offered suggestions for brands to use H&M’s network as a resource. Her main focus was to educate customers and raise awareness about materials.
She said, “The intention must be loud and clear. Sustainability is not just about activation. It must be an integration of business model.”