Digital business models are taking over retail and logistics

Experts on retail and logistics gather to discuss Asia’s economic recovery and the shift from offline to online 

Last 23 September 2021, Stephen Oehme, managing director at Quantum Thailand Ltd and chairperson of the 2021 PropertyGuru Asia Real Estate Summit, discussed the merging of offline and online retail and logistics with industry experts.

To start off the panel discussion, Dr. William Thomas, director at South East Asia Economist Intelligence Corporate Network, shared insights on markets across the Asia Pacific region, explaining the unevenness of economic recovery. He noted that several markets like China and Taiwan have seen stronger growth that reflected their GDPs at the end of 2019, while many lost their ground in 2020 and are looking to recover later in 2022 and 2023, including Malaysia, Thailand, and the Philippines.  

Factors that contribute to economic recovery include COVID-19 management, government-introduced physical stimulus, as well as vaccination schemes. With populations predicted to be fully vaccinated at different periods, the opening of economies and the return of retail, F&B, and social activities will be very uneven across the region. Hence, we can’t ask how Asia is doing, but “we need to look market by market”, says Dr. William.  

Moreover, emerging markets will be showing the highest growth in consumption for the rest of the decade. This is due to their large inequalities, and their rapidly growing middle classes that have started to fill these gaps. As income levels rise, people will be spending differently, with higher consumption taking action online.  

Michael Ignatiadis, head of supply chain & logistics solutions at JLL APAC, talks about the current state of customer-driven supply chains, including changes in footprint and macro trends that support shifts.  

What’s next for supply chains and logistics is to find ways to get closer to the customer, meaning more locations and logistics real estate. More companies have now switched to omnichannel models, serving customers anytime, anywhere.  

Additionally, e-commerce has undoubtedly been tremendously accelerated by the pandemic, while more and more physical stores are experiencing closures amid this unprecedented time. Therefore, the landscape of the supply chain industry will change immensely in the upcoming future.  

Lastly, Paul Ashburn, co-managing partner at HLB Thailand and ASPAC Leader at HLB Real Estate Group, commences his session by stating that “the digital economy is growing 2.5 times faster than the global GDP at the moment.”  

In the first half of 2021, more than 8,700 British chain stores have had to close due to the pandemic, with 14 brick and mortar businesses closing every day in the UK last year. This recent data shows how quickly digital business models are taking over retail.  

Furthermore, research indicates that seniors could be spending two to three times more than the average user, a big market that companies shouldn’t overlook. Small businesses have become dependent on online platforms, particularly as factors like higher rent and less foot traffic force brick and mortar stores to shift online.  

“The world will not return to how it operates pre-pandemic”, says Ashburn.  

Ashburn closes his presentation, touching point on the challenge of going green in real estate. The pandemic has put our sustainability efforts a step back, but it is returning as an urgent agenda that the world needs to address. A lot of green considerations will be forced by new regulations, as well as companies’ own CSR guidelines.  

“Choosing partners will be very important in delivering environmentally-friendly strategies – it’s not just about saving the planet, but also building a better brand and customer loyalty, both online and offline,” concluded Ahsburn. 

PropertyGuru Asia Real Estate Summit launched its webinar series last year, dubbed the “Asia real estate reboot,” which was in preparation for its first virtual summit in December 2020. The new PropertyGuru Asia Real Estate Summit: Virtual Edition opens on 8 December 2021.  

Watch the full webinar here:

Download the speakers’ presentations below: