Asia’s burgeoning middle class offers tremendous growth opportunities for food companies, and one of the best ways for new entrants to capture this niche market is to learn from the premium retailers in the region.
Says IGD’s senior retail analyst, Jenny Li: “International companies that operate in the region are putting more emphasis on supermarket and convenience stores. In our opinion, they should also look to the premium store format as a potential opportunity to grow their business.”
OECD forecasts show that by 2030, two-thirds of the world’s middle class will be living in Asia. This, in turn, means an Asian populace increasingly affluent, aspirational and eager to try products from all over the world. Retailers can look to harness this trend via their premium formats.
They can, in particular, learn from the best practices of Asian premium retailers in three key areas: Increasing the appeal of international products, promoting relatively new product categories, and upgrading food-to-go and food-for-now solutions.
These can help to drive store footprint and cultivate a potentially even bigger pool of consumers for international food products and brands, Li observes.
Increasing the appeal of international products
Upmarket stores in Asia have experimented with a wide variety of promotional and merchandising tactics to market overseas offerings. From country flags to bold signage in stores, “they deliver reassurance on authenticity and quality, given the view that western products adhere to higher standards”, she says.
Country-themed events, for example, are great opportunities for cross-merchandising.
The Great Food Hall in Hong Kong held a Japanese food festival to tap into the growing appetite for Japanese snacking, and Jasons in Singapore installed a creative ‘Eiffel Tower’ to draw shoppers to a range of French agricultural products.
Promoting new categories
Products like wine and cheese may not be alien to consumers here but they are still relatively new product categories that can — given time and effort — become far more popular among consumers.
Retailers play an important role in this process by engaging and educating Asian shoppers about them. They can, for example, introduce wine promotions, offering professional advice and tasting events to help shoppers in their choice.
Another promotional method is to highlight health benefits — for products such as olive oil, organic fruits and vegetables — like what the Ole’ Shanghai store did with illuminated
signs to communicate various fruits’ nutritious values and health benefits.
Food-to-go and food-for-now
Local supermarkets are also evolving as destinations for takeaways and dining-in food, Li points out, and some new food solutions can add even greater value to their overall offer.
Central Food Thailand, for instance, optimised its food counters to offer an array of buffet bars with salads, delicatessen and cooked meals. And Matahari’s Foodmart Primo has a dedicated dine-in area where customers can order directly from a menu and have it cooked by professional chefs there.