Retail landlords must incorporate technology schemes into their mall developments in order to compete with the growing E-commerce industry in Southeast Asia, according to CBRE.
The real estate advisor noted a majority of the region’s demographics is composed of the younger population.
In a report, it noted SEA’s e-commerce potential will be driven by the relatively young population, high smart phone ownership, and active use of social media.
CBRE cited a study by investment firm Temasek forecasting e-commerce to account for 6.4 percent or $87.8 billion of total retail sales in the SEA market in the next 10 years.
“Indonesia, the Philippines, and Vietnam are set to lead this growth with Indonesia expected to account for 52 percent of the e-commerce market by 2025.”
At the end of 2015, the regional e-commerce market account for only 0.8 percent or $5.5 billion of total retail sales. CBRE noted 60 percent of the population in Southeast Asia is 35 years old and below.
“This young population is a generation that has lived most of their lives surrounded by technology, thus they are savvier and exposed to myriad views and influences online,” CBRE said.
With the potential growth of e-commerce in the region, landlords who own physical retail stores must be able to evolve with an evolving technology.
“Retail landlords . . . cannot afford to rest on their laurels, and must evolve with the times to stay ahead in a fast-changing retail landscape where the boundaries between the physical and digital are increasingly blurred,” the report said.
Retail landlords should capitalize on the high internet usage and high smartphone ownership in the region by providing free Wi-Fi access in mall developments, as well as creating social media accounts
“There are also more shopping centers in SEA which provide free Wi-Fi; this incentivizes visitors to stay for a longer time and empowers visitors to do online research about the development and its tenants or update their social media accounts in which they can tag their location,” the real estate advisor noted
Creating social media accounts will also help retail developments reach out to consumers for better client engagement. This can also be a channel to promote the retail development’s offering and promotions.
“SEA consumers are frequent users of social media and expect that they can get in touch with retailers and shopping center managers to ask questions, give feedback, and receive updates on the latest promotions or events,” CBRE said.