Retail evolution in Asia

28 May 2021

Retail industry is going through rapid changes in Asia The following two articles explore how the industry may draw inspiration from both the future and the past.

Efficient and sustainable last-mile logistics: Lessons from Japan

As people increasingly expect instant delivery times, last-mile delivery systems are becoming a bottleneck. Logistics providers are overwhelmed with rising volumes of goods, leading to slower delivery times, less flexibility in delivery time slots, and higher delivery costs for customers. Using Japan as a country to model simulated projections, the World Economic Forum and McKinsey came to the conclusion that delivery robots – small, personal delivery devices that can transport packages – may be the best solution to increasing costs and labour shortages. Media reports claim that the Japanese government will allow the use of delivery robots on roads as of 2021.

A widespread deployment of delivery droids, however, would require multi-stakeholder collaboration in key areas. At the regional level, it is crucial to develop joint delivery systems, optimising individual sorting centres and improving the efficiency of the overall regional network. At the neighbourhood level, it is important to manage the parking spaces, increasing the delivery and efficiency of delivery operations. Finally, from truck to doors, it is essential to govern the robot operations on pedestrian walkways, ensuring safe and reliable operations on paths shared by pedestrians.

Read the full article on the McKinsey website.  

Mum-and-dad stores at centre of India’s $850bn retail evolution

Large retailers in India, such as Amazon.com and Reliance Retail, are racing to bring tens of millions of small family-owned retail stores, known as kiranas, into their supply chains. The 20m kiranas spread all across the country account for 88% of the bricks-and-mortar market. With India’s retail market estimated to grow to $1.5tn by 2030, it is a massive opportunity for any company that can consolidate the supply chain and become a ‘super distributor’. By replacing the wholesalers that small retailers rely on, big retailers can access a wider audience. Kiranas, on the other hand, get to enjoy the discounts the giants offer allowing them to sell at a lower price to customers. Discounts apart, some of the platforms offer credit lines which are essential to this cash-heavy sector. Despite these incentives, the digital platforms in India still have quite a way to win the kirana owners over.

Read the full article on the Financial Times website