APAC retailers rely on supply chain innovation, ESG to meet post-pandemic challenges
Retailers must adapt to new consumer demands, leverage technology to improve supply chain efficiency, and embrace ESG sustainability: PwC.
In today’s economic landscape following the pandemic, an expert in Asia Pacific retailing has pointed out the need for supply chain innovation, adapting to changes in consumer demand, focusing on last-mile delivery, and exploring new business models in the region.
In an interview with Retail Asia, Michael Cheng, PwC’s Asia Pacific, Mainland China and Hong Kong Consumer Markets Leader highlighted the importance of improving supply chain efficiency and effectiveness through innovation and the adoption of new technologies.
Cheng cited how companies such as Alibaba and Walmart have used blockchain to ensure the traceability of products, making consumers more knowledgeable about their purchases. This has led to increased product attractiveness and potential for higher prices.
PwC also observed that the retail industry has focused on last-mile delivery, with supermarkets adopting technology and innovation to ensure regular product delivery to consumers.
Cheng acknowledged that retailers and manufacturers faced tough challenges during the pandemic, particularly with the lockdowns and supply chain disruptions caused by events such as the Russia-Ukraine war. These hardships have forced businesses to adopt a conservative approach to ensure survival and prepare for post-recovery growth.
Moving forward, though, Cheng said retailers and manufacturers must now focus on consumer needs and use technology and innovation to better serve them. He cited the PwC’s 26th CEO Survey, in which 69% of Asia Pacific CEOs expect a decline in global economic growth, whilst 53% believe they will not survive the next decade without significant changes.
Cheng suggested that key performance indicators for retailers should include not only profit and loss accounts or revenue growth but also qualitative indicators such as customer surveys and feedback.
Environmental, social, and governance (ESG) sustainability is a hot topic that retailers and manufacturers are taking seriously to ensure consumer satisfaction.
In the interview, Cheng emphasised the importance of ESG-related data in attracting consumers, particularly younger generations who are willing to pay a premium for products with strong ESG credentials.
As for notable trends in the second half of 2023, the PwC executive identified the importance of technology, particularly generative AI and the metaverse.
He also highlighted the growing importance of brand value, as retailers must work to make their brands relevant and attractive to consumers.
Additionally, Cheng predicted a bright future for the luxury sector, with Chinese consumers playing a key role in its continued growth.
