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At the Asia Fruit Congress: Peter Gale, Nielsen
Asia retailers less affected by recession, but looking to attract more customers

At the Asia Fruit Congress in Hong Kong one of the highlights was the presentation by Nielsen representatives, Peter Gale and Lisa Cork. Their work was centred on the ways Asian retailers can develop in each country taking into account the current recession. They talked about the large differences in behaviour among neighbouring countries. In today's issue we will summarize some of the conclusions reached by Mr. Peter Gale. During the next few days we will continue with comments from other sessions at the Asia Fruit Congress.

The economy is just recovering from a very strong recession, according to some analysts. But what happened really? Banking crises caused a consumer debt crises which harmed particularly the manufacturers and value added industries. The fresh produce sector felt less effects. In this particular sector, retailers could see an "opportunity rather than a crisis" this was the main topic of this session.

Mr. Peter Gale, from Nielsen, talked about the diversity of the Asian region. In terms of population one group comprises of China and India and on the other side a set of countries with different ranges of income from the US$2500 per capita in Vietnam to US$49700 per capita in Singapore. With these huge differences is very difficult to determine a predominant way of retailing, he concludes.

However some of the most important trends are developing in the "self-service" shopping (in the case of Korea) and the mini-markets (in the case of Indonesia, Malaysia and China). The predominant retailing is based on convenience and competitive prices, which gives consumers enough reasons to choose this kind of market.

Once, the hypermarkets were the most popular way of shopping due to the low prices. At the moment there are 3000 in the whole region, of which 60% are located in China, however convenience is affecting their dominance. One of the most affected by the strong competition of smaller towns has been the supermarket. According to Mr. Gale, supermarkets have to look to diversify if they want to survive in such a competitive retail market.

Diversification could be:
- Improving fresh food offers
- Higher quality
- Loyalty card programs
- Private labels
or government regulation, since supermarkets have a higher political visibility and they could take advantage by "suggesting" governments special status.

To conclude, although recession affected most of the sectors, perhaps one of the least affected was the retail sector in Asia. According to Mr. Gale, the increasing prices in retail put sales at a record high compared to the average of the last 10 years. Essential products (food) was less harmed and quality perception is still a very important issue in the decision making process from a consumer.

It is expected that in the short term consumer confidence will increase once again and this will generate further development of the retail sector. The predominant way of shopping would depend on the consumer preferences and ability of retailers to attract more and more consumers.

Based on the presentation of Mr. Peter Gale from Nielsen.

Publication date: 9/10/2009
Author: Jahir Lombana


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