30 oct zd_net_mobile-savvy asia primed for virtual stores
Client : PayPal Country : SingaporePublication : ZDNet.comDate : 30 October 2012Topic : Mobile-savvy Asia primed for virtual storesURL : http://www.zdnet.com/mobile-savvy-asia-primed-for-virtual-stores-7000006601/Daily :Readership 15Mobile-savvy Asia primed for virtual storesSummary: Physical stores leveraging mobile technology will appeal to Asian consumers who alreadyenjoy shopping online, value the convenience and are tech-savvy, and also enable retailers to savecosts.By Ellyne Phneah | October 30, 2012 -- 11:46 GMT (04:46 PDT)Asia region is prime for virtual stores, which have been surfacing this year, as most of the populationhere are already receptive to e-commerce, value convenience, are mobile-savvy and can look tothese "semi-physical" stores to enhance their shopping experience.Unlike digital and online stores, virtual stores exist in the physical world but products sold are notphysically available during the shopping experience, remarked Aapo Markkanen, senior analyst ofdevices, applications and content at ABI Research.Instead, retailers make use of mobile technology--specifically, QR codes--to enhance the shoppingexperience in these stores, he explained.Technology also enables retailers to collect customer orders and deliver the products directly tocustomers, he said.Some Asian cities already have rolled out virtual stores. U.K. retailer Tesco, for instance, last yearlaunched virtual shelves in South Koreas subway stations under its HomePlus brand, while PayPal inFebruary rolled out a trial in Singapores MRT stations allowing consumers to scan QR codes topurchase products displayed on billboards.Chinese e-commerce giant, Yihaodian, in October launched a variant of Tesco and PayPals virtualstores by making use of blank city spaces around the country and augmented reality technologytoallow customers to shop virtually and have their goods delivered to their homes.Suits Asias young, e-commerce savvy populationThe concept of virtual stores is set to gain traction in this region because its inhabitants alreadyare receptive to e-commerce, so the bar to adoption will not be too high, Markkanen explained.
Virtual shops allow shoppers to save time in comparison to traditional shopping experiences, whichis beneficial in Asia where large cities exist and long commutes by passengers are prevalent, headded.Spike Choo, principal consultant of ICT Practice at Frost & Sullivan Asia-Pacific, agreed, noting thisform of virtual shopping mimics "a typical trip to the groceries or local minimart", but provides amore convenient way for busy commuters to replenish their daily necessities while commutingbetween work and home.Furthermore, this service will appeal to young adults between the ages of 20 and 35 who valueconvenience and are already familiar with online and mobile shopping, Choo noted.Markkanen pointed out it also could add some "hands-on" feel to the digital shopping experience,filling a gap which many online shoppers miss out on when they make online purchases.For retailers, therefore, virtual shopping may encourage more impulse purchases since shoppershave a better idea and feel of the products, he pointed out.Choo added the high costs of real estate in key Asian cities such as Singapore, Hong Kong and Jakartawill also encourage more retailers to explore virtual retailing, which requires less physical space thantraditional shops."It can lower business costs [for them] substantially while extending their reach to some of the mostvaluable customer segments," he said.User experience, instant gratification needed for successTo attract targeted customers, retailers should ensure virtual stores mimic real-life shoppingexperience as much as possible, Choo advised. For example, images displayed should be the actualsize of the product and labeled clearly to enable a shopper to confirm the purchase as fast aspossible, he noted.It is also important for retailers to ensure the smartphone application used in the virtual store cancontinue to work amid intermittent and sporadic mobile data connectivity, especially for virtualshopping walls installed in subways and bus terminals, he added.Markkenen noted store logistics should also be effective enough to permit same-day or next-daydelivery of purchases.In addition, Choo said, logistics should offer flexible home delivery, especially same-day delivery tothe home or office, and support flexible payment models based on local market practices such ascash-on-delivery.