Faaez Samadi
Jun 11, 2019

Amazon remains Asia's top online retailer but competition is hot

Large brands maintain their dominance across all our retail subcategories, but fashion continues to be a battleground, with the likes of Penshoppe and Muji making waves.

Amazon remains Asia's top online retailer but competition is hot

CATEGORY ANALYSIS: RETAIL

Fast fashion can be a fickle business, as Uniqlo found out to its cost in Asia’s Top 1000 Brands 2019. The Japanese high-street brand, which shot up last year’s rankings to 38th place, fell 31 places to 69th in 2019. It’s hard to pinpoint why, as Uniqlo seems to have maintained the marketing strategy that led to its success, adding to it with moves such as growing its sports division by becoming the outfitter of the Swedish Olympic team. It is likely a reflection of the intense competition in the sector and the hyper-malleable preferences of APAC fashion consumers.

Uniqlo’s main rival in the Top 1000 Brands fast-fashion space, H&M, continued to fare well, moving up three places to 62nd. Zara finished 48th overall this year, up four places thanks to ranking 2nd in the women’s apparel subcategory, but only 17th for men. Tracking in the opposite direction is Levi’s, which placed 1st for men’s apparel and 8th for women’s to finish 63rd overall, an 18-place slide from 2018.

For all the tussling between these established brands, it may not be long before they have some new competitors to fight. Japan’s Muji leapt 381 places this year, to 331st, highlighting a surge in consumer interest around its simple, charming, unbranded aesthetic. Even more impressive is Philippines’ fashion brand Penshoppe, which catapulted 398 places up to 413th. Its gambit for going big on influencer marketing—the brand has recently signed up Kendall Jenner, Paris Jackson, Gigi Hadid and Zayn Malik—appears to be paying dividends. It will be interesting to see where these brands are next year.

As for the wider retail category, the big players consolidated their presence. Carrefour and Tesco continue to lead the supermarkets subcategory, Watsons and Guardian further cemented their pharmacy supremacy.

However, competition in the online retailer space continues to heat up. Overall, Amazon remains in front, despite dropping 11 places to 34th, with Lazada next at 90th overall, a 28-place slip from 2018.

Some of this can be explained by the increased fragmentation in the APAC online retail space, which is reflected in the diverse range of brand preference by market. Amazon is top of mind in India and Japan, where its APAC operations have been around longest, while Taobao leads in China and Hong Kong, somewhat unsurprisingly given both markets’ linguistic and cultural commonalities.  

Lazada has a firm grip on Southeast Asia, being top in Malaysia, Vietnam, Thailand and the Philippines, although it is pipped to top spot in Singapore by Korean online retailer Qoo10. Moreover, Indonesian platform Bukalapak reigns supreme in its home market, illustrating the fierce competition in online retail, which is predicted to only become fiercer in the coming years.

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