Disruptive factors in the retail cycle

Asia’s retail sector is undergoing vigorous change, as brands seek to refine the integration of online and offline channels, while product portfolios and customer choice are expanding. Overlaying this forceful process are new disruptive factors, such as megasale events, duty-free sales and intelligent malls.

Disruptive factors in retail sector

Online megasale events like Singles Day in China are influencing consumers to focus their online purchasing on unique sales promotions. Singles Day was created by Alibaba on November 11 (11/11) 2009 to promote e-commerce, and has proved a huge success. In 2015, Singles’ Day generated RMB 91.2 billion in sales, a 60 percent increase on 2014.

Across Asia, online marketplaces and brands that sell are also creating special shopping discounts and flash sale promotions based around significant public holidays, such as Chinese New Year and Hari Raya/Eid ul Fitr in South East Asia.

Duty-free shopping malls are springing up across the region, from Seoul to Sanya, Tokyo to Shanghai, Bali to Siem Reap. Designed to appeal to Asian travelers keen to shop while on vacation, the malls sell capacious volumes of tax-exempt branded luxury goods, clothing, cosmetics and skin care products, jewelry, eyewear and personal accessories.

To induce shoppers to spend more in bricks-and-mortar stores, intelligent malls are being developed. By combining location-based communication services, sensors and shopping data analytics, smart malls can create both personalized and mass digital messaging that guides shoppers toward specific brands and promotions.

Consumer payments in some Asian markets, notably China, Hong Kong, Japan, Korea and Taiwan are evermore cashless, contactless and voiceless. The “digital wallet” trend is gaining traction in South East Asia, but – for now, at least – at a noticeably slower pace as cash-on-delivery remains a popular method for settling online purchases. 

Driven by cross-border e-commerce, contactless payment solutions enable both consumers and companies to procure products, business components and services using their own self-service technologies, such as smartphones. This is removing the need for human interaction in the sales process, with any additional communication usually managed through specially created “chat” channels built into the online sales platforms, or via messaging apps. Success in the e-commerce domain is encouraging payment services providers to roll out contactless payment options for bricks-and-mortar stores, healthcare centers, duty-free outlets, hotels, airlines and educational institutions throughout Asia, and create similar time-saving transactional services for entrepreneurs and SMEs. 

Four made-in-Asia cashless payment systems are increasing their regional and global presence:


Launched by China’s Alibaba in 2004, AliPay counts around 450 million Chinese users who purchase goods and services online, and – increasingly – offline. Alipay has partnered with German payment processing company, Wirecard, and in July 2016, Munich Airport became the first airport in Europe to roll out the Alipay system at 70 retail stores.

WeChat Pay

Launched by Chinese tech giant Tencent as part of its diversified WeChat digital ecosystem, this online payment mechanism is increasingly popular in China, and as WeChat users increase regionally and globally, is predicted to gain greater international penetration.

Samsung Pay

Introduced in South Korea in 2015, Samsung Pay is a mobile wallet that allows users to pay with their Samsung smartphones. The system processed more than USD 1 billion in transactions in its first year. It has been rolled out in the US, Spain, Singapore and Australia, with expansions planned in Brazil, Canada and the UK in 2016. 

China UnionPay

Pioneering bankcard payments for Chinese consumers, UnionPay has been adopted worldwide by airports, brand stores, retail centres and ATM providers. It is accepted in all FamilyMart, Lawson and 7-Eleven stores in Japan, and Watsons in South Korea. In July 2016, UnionPay announced its newest footprint: education. More than 2000 educational institutions in the US, Canada, Australia, UK, New Zealand and Singapore will accept UnionPay cards for tuition payment.