Display mode (Doesn't show in master page preview)

28 Dec 2017


More Challenges Facing Retail Trade in 2018 Amid Rising Competition from Non-Retail Businesses (Current Issue No. 2891 Full Ed.)


The phenomenon of swift expansion and continual uptrend in e-commerce is viewed by KResearch as a significant turning point in retail trade resulting from the digital era, especially after the entry of large, foreign e-marketplace websites. In 2018, e-commerce growth will likely reach 20-25 percent YoY, in continuation from the high growth experienced in 2017, which is attracting many non-retail businesses into the field. Such non-traditional operators have expanded new lines of commerce and are exploring integration into online retail trade, although with varying objectives. This situation signals intensified retail trade competition, which will become more evident over time.

Previously, each retail business operator attempted to adapt themselves to new competition. Their adjustments included the redesign of physical space (by large operators) into ‘Edu-Zones' for children, or ‘Co-Working Space' for working people. Meanwhile, medium-sized businesses have sometimes opted for ‘niche' or ‘unique' products to attract prospective buyers. However, amid the ever-changing competition in retail trade, retailers, overall, will likely face various new challenges, and therefore, will likely need to use fixed asset management to achieve the most rapid and worthwhile returns, but also the most challenging effort for them in 2018.

For long-term sustainability, business adjustments are needed at every level of retail operations. Retailers must gain a more precise understanding of their customers' lifestyles and behaviors, possibly by means of ‘Big Data', data analytics and perhaps even AI technologies, thus to acquire such insights that they may employ toward management of their commerce and linkage with retail channels – i.e., ‘Online-to-Offline', or ‘020' commerce – at their physical and perhaps even online shops. Eventually, retailers that learn to best manage both those two channels will enjoy a greater advantage over their peers.

View full article