Hi, I'm Reef Kwail. I'm managing director of NRF APAC and this is Five Things Friday APAC edition. Oh. Hello, how are you my friend? Yeah, I'm good. We're missing you in. I know. Those Malaysians are hard to They're hard to pin down those Malaysians. You got to watch them. It's all right. They'll come We'll find her We'll find her. She's hot She's We'll find her. Don't panic. Yeah, all right, buddy. Well, let's let's just jump straight into it. What's top of mind for you this week? I've got a couple of couple interesting ones. First of all, you don't often hear about supermarkets shutting stores. Okay. But this is exactly what's happened in Australia this week. So, Coles supermarkets, one of the big two of in terms of supermarkets in Australia, has shut its Elizabeth Street store in Melbourne CBD. So, in the CBD of Melbourne. And really at the end of the day, it's it's an area which is notorious for challenges with the crime and antisocial behavior. So, this area The The growth in retail balance has become unacceptable. So, you know, even Coles has even partnered with what a group called Crime Stoppers, which is is linked with the police to combat retail crime because it's such a problem Uh and that's sort of, you know, if you look at that You think about a a supermarket closing a store because of retail crime. It's a huge problem. And the scale of the problem in Australia is is something like, you know, we're talking about a 400 nearly 500 nearly 600,000 thefts theft victims nationally.
And 44% of these uh instances occurring in retail environments. And then it equates to between 7.8 and 9 billion dollars annually in retail crime. Wow. It's We're seeing organized crime having, you know, real coordinated approaches to this. You know, and we're seeing things being stolen All sorts of things being stolen, whether it's cosmetics which got a high resale value to baby formula cuz such strong secondary markets um to, you know, to designer apparel because designer apparel because brands are in demand, sporting goods cuz there's retail resale opportunities, that sort of thing. And then you've got this whole layer of of of violence against retail workers. Both Australia and New Zealand, it's verbal abuse, it's intimidation. In fact, we had two degrees speak at NRF this year or last year in APAC. And a number of their stores in New Zealand, not Australia but the same sort of vibe, have safe rooms. So when it becomes too much, the staff can retreat to to environment. So these are Telco. Two degrees is a Telco that sells mobile phones and mobile data plans.
Wow. Like yeah, you know? So Yeah. that's how significant the problem is in both Australia and New Zealand. So it's not it's it's an increasing problem. It's an increasing problem. Yeah. And there's it's a big agenda item for the Australian Retail Council and NZ Retail. Got you. Got you. So it's Okay. I mean, listen, that that is a It's the dark side of retail. But you know, it's all good. No, but it's echoed in the UK, it's echoed in the US. It is a unfortunate trend that that keeps growing. Okay, what's second? What's second thing on your on your radar? The second thing I want to talk about is the the rise of membership retail in China. We've seen and we've heard from Sam's Club at NRF APAC. And they've been incredibly successful. They've they've expanded aggressively. You know, they've you've opened I think something like 60 60 warehouses across across the region.
Um so they're they're a big player. But in recent times, Costco have come into market. And they arrived in China in 2019. And they've been a bit more deliberate with their expansion. They've only got seven warehouses, but they've got a strong private label. What what we're finding is most recently they've just announced um rather than being focused on physical club, they're taking their membership digital. And so what they've done to underpin their Chinese expansion is open a specialty store on jd.com. Got you. So that So they'll still honor the member and not they'll charge they'll still honor the members' prices for members. So, you'll still be recognized as a member. Non- But, non-members can also access their products at higher higher prices. But, what we've seen in China with Sam's Club and Costco is the Chinese have really embraced membership.
Okay. So, we're seeing Chinese consumers are totally up for accepting paid membership to access quality, value, and the and and the Costco brand that that that the Costco private label brand has been accepted as as almost as a premium. So, the cost is it's Kirkland Signature. But, it particularly well because it has a reputation. It's got perceived quality, but it's lower prices than other premium brands. So, it's actually these these these membership plays are coming on coming on strong in China from out of the US. And uh but, Costco have done this deal with JD, which is really uh sort of beginning to turbocharge their presence there. Got you. Uh that's about all for today. Uh I I love it. Vietnam. Yes. Their e-commerce numbers have gone through the through through the roof. You know, they've got a population of around 100 and What is it? 1 million people.
A part of Indonesia. Yeah. Vietnam is the big is a big market in terms Yeah, for retailers, of course. And and But, no, in terms of But, in terms of population, it's a big market. And what would you mean by that? Sorry. Go on. Well, you know, how many So, it's got 85 million internet users. What's the total population of Vietnam? It's 100 and something. Yeah, so Malaysia's 35, Singapore's five, you know? 102 million in 2025. That's a That's a big market, mate. It is, but the population growth isn't growing. It's growing at 0.1% almost. It's 0.99. But, anyway, The interesting The interesting thing about Vietnam I'd be interested to see, too, is what is the age bands? Cuz I've a feeling that Vietnam is quite a young market. I I tell you. under 15s, 23.6 million. Age 15 to 64, 68.2 million. Age 65 and above, 9.4 million.
But here's the rub, age Well, actually that Well, I don't know why it's giving me those two numbers because it says age 60 uh is about 14.2 million. So, above 60, you've got about 14 million. And Yeah. Yeah. And that And that And that's not surprising. I mean, you look at the Philippines, you look at Indonesia. Yeah, and these are developing markets with which are very youth-led. And so, therefore, you also see that the dominance of people like Shopee and TikTok Shop because it's very mobile-led. There's no There's no traditional broadband. So, it's all M-commerce. Yeah. Yeah, these are like every other um Asian country, live commerce is spectacular. Yeah. So, you look at it and go, "Okay, cool. Look Look at the top categories by revenue. Beauty and personal, live commerce area. Women's fashion, live commerce, you know?" Yeah.
So, it's So, then you And you've got grocery and food is really important, too, because when you see one of the things you do see in markets where e-commerce is really tipping over and becoming a dominant channel, is when grocery has really big lift. Right. E-commerce retail e-commerce goes from novelty to everyday. Yeah. And when when grocery tips over, then everything the whole all the high tide rises all boats for all of the whole the whole the whole of all the categories across e-commerce. Yeah. But you can see it's Look, I mean, look at TikTok Shop there, you know? B Yeah, no, Shopee and TikTok Shop are the dominate the market, right? Roughly 10.6 billion in sales combined. Well, TikTok Shop is all is basically all live commerce. Yeah. I I mean, it's incredible. So, you don't It's cuz that's You go to North America or to the UK or to Europe or to Australia Yeah.
to have that volume of sales coming through a live commerce channel which is Yeah, I I think it's a it's a it's a maturing market and it's an interesting one. I just felt that there's uh there's it feels like we we we need to spotlight these I I think so. these countries that are sort of bucking the trend for growth. Maybe what we could do is have a chat to Simon Kemp, one of the NRF APAC advisory board members. Okay. And he can produce a like a card like this for every for every country. Oh, well. Okay. Yeah? Yeah. Okay. And we and we can give him a plug on the way through for providing the data. Sure. Okay. Well, listen. Sorry, go mate. No, no, I'm just saying these sort of things are fascinating, and one of the things that's come through for us in the show in terms of curation of content is there is a constant appetite for deep dives into countries like diagnostics like that.
Yeah. Well, that was good to see of the retail podcast. Yes. Thank you, retail podcast. Well done. But um yeah, so we can we can we we can get that data prepared for us, and and yeah. Yeah, the the what what I the Vietnamese government uh put some data out that when I saw it was super interesting because they were talking about e-commerce growth. And then when I went to it, what what was more interesting for me is that there was only two suppliers of that growth, which is Shopee and TikTok, and 610 brands underneath that. And I was thinking, that's a fascinating market, right? That's totally different from any Western market. And and do people understand it well enough to to, you know, have a growth strategy there? Well, you think you think about that right for a moment. All those numbers are coming from live commerce, well, all that is almost non-existent in the Western market.
Yeah. It's I've got to be honest, it's it's beginning to change. What we're seeing like, you know, last week's story that we did together that you guys were like, the Uber Eats and the Carrefour, Uber Eats like, you know, quick commerce via Uber Eats is growing. You know, the Tescos in the UK is investing more and democratizing that to any So, their last mile delivery could be, you know, fulfilled by multiple players, and Uber being one of them. And it feels like it it You know, we used to say that oh, it only happens in India because the the model uh lends itself to an Indian model cuz labor is so cheap. It feels like that that's changing a little bit. I think it was really fun and and you talk about democratization of of like last mile.
Yeah. Interestingly enough, in New Zealand a while ago when I was living there, uh a decade ago, it was the rise of the food services. So, people would get those, you know, your meal boxes delivered. Like so, they So, you and you get three or four meals you could or pre-made you could all the ingredients you could cook each week. Okay. And they created all of this courier inventory where [clears throat] people had all this stuff being, you know, ordered and they would deliver their food for the next for the week for the next day, right? And what because this inventory is all created, one of the retailers, Glassons and Hallensteins. Hallensteins for for for, you know, young blokes and Glassons for young women. Yeah. And what they were doing is they found that they could do same-day e-commerce delivery off the back of an order. If the order was in by two, but the thing is that they would get delivered to people's homes because what what they found was when they got when a 23-year-old got a box delivered to work, it was frowned upon. But, they could order stuff at work and get delivered to their home after 7:00 because they had this this all this spare inventory in courier that that all of a sudden they created they created a whole different courier classification and product.
Okay. So, all these fashion retailers are getting product delivered ordered at work so they get delivered at home after 7:00. So, they'd be home behind to get get the package. [laughter] Yeah. Okay. That's Oh, anyway. On that bombshell, I think it's a fantastic way to end this week's show. Reef, my friend, actually next week I'm not here. I'm in Japan. So, I'm in Japan. big in Japan. Huh? You'll be big in Japan. [laughter] Anyway. Uh so, I'll see you in two weeks' time. Absolutely. I look forward to it. Um Okay. See you back. Fantastic. You and I has been able to join us. Unfortunately, Reeves not in the room anymore. He's at He's left. So, Youan, what's top of mind for you this week? Yeah, I was I was hoping that I can catch both of you together. Okay, so one of the biggest things that struck me walking through the Food & Drinks by SIAL Kuala Lumpur this year. We just happened a couple of weeks ago. What's really a new product? It was the fact that almost every other aisle seem to be talking about health. So, functional food no longer just a category is becoming a default. So, 5 years ago maybe just talking about functional food is difficult. It's very a very difficult pitch. And you may be saying that oh, it's such a niche category. You may have like probiotic drinks, maybe vitamin 45 cereals, collagen beverages, few protein bars maybe. But today, every other food is with functional benefits. If you don't have functional benefits, I'm not going for you. I have to go for something with functional benefits.
Yeah, it just seems so boring if you don't have anything fortified on there. exactly. Coffee suddenly has got mushrooms for focus. Your sparkling drinks maybe has like better gut health. Cereal is high in protein. Your noodles have got very have got the the collagen support. It's really It's really a different world. And young people are so aware that it's crazy. So, this is changing everything for retailers. So, we're not We are really rethinking how to organize our shelves differently. Yeah. So, it's not just functional food separate from how the rest of the food are. Now functional food is a part of what the other category is. That's super interesting. I mean, in the West we've got the GLP-1s having a massive impact. And so, people now being more aware of the type of food that they're eating. Okay, fantastic. Super interesting. I actually really do love this. What What's point number two for you?
Yes, for number two is also food related. I want to very quickly just, you know, get everyone to be aware about how K-food, Korean food So, we got K-beauty now, K-food. Yes, yes, it's now growing up. So, it was it used to be Korean food, K-food, you know, but now it is becoming local Korean. It's fascinating because I think the the evolution of things success really meant importing directly from different countries, right? So, K-food is from Korea. So, authenticity was like the thing you go after. Korean ramen from Korea, for example, Korean snacks from Korea, for example, sauces from Korea. But then now we are seeing a little bit the change. We we're seeing that K-food is now not as important to be imported, is now being localized. So, you see Korean flavors adapted for our food, for Malaysian food. Kimchi, for example, is less as Today, gochujang products with different spicy levels so that different kind of different country that you're in is able to adapt. Inspired ready meals, for example, are produced locally. I think we've seen a really good example of that in the last two years with some of the Korean ramen working alongside the local Thai super Thai personality, for example, which is using a lot of the locality inside. So, we are seeing this cuisine mature quite a bit and and that is a signal that it is no longer just bringing Korean food into the country.
It is really about partnering with Korean brands, understanding what consumers here really enjoy, and then we create products that feel Korean, but can be designed for a completely local lifestyle. I love it. Well, Yewon, thank you for taking the time to join us today, and I think two beautiful signals, which to be fair, both of them I've not really thought about. So, fantastic. Thank you. Until next Thank you very much
