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Turning compliance into an opportunity: What SE Asia can learn from the mistakes of the western markets

Anant Choubey, Regional Head – APAC, Capillary Technologies | Sept. 1, 2014
The growing use of consumer data has seen Southeast Asian countries adopting regulatory frameworks similar to that of western markets to protect and safeguard misuse of personal data

In response to the internationalization of retailing, the retail sector in Southeast Asia is rapidly modernizing and transforming. With global retail conglomerates such as Carrefour and Tesco entering these regions and expanding rapidly, the established and conventional market structures have transformed into competitive consumer markets. The retail industry is a significant source of economic growth and employment for most of the major cities of the region. Therefore, competition from the local players, both for increase in market share as well as profitability, is intense.

As these markets continue to grow, regulations are also evolving to manage and control competitive practices, safeguard and upgrade traditional retailers, and protect and secure the use of consumer data. In the last few years, several countries in the region have introduced policies to help modernize traditional retailers, and balance the growth of multinational and domestic companies.

In Indonesia, the Business Competition Supervisory Commission (KPPU) came into force a few years ago in the wake of aggressive expansion by Carrefour and Indomaret. The commission restricts the expansion of such companies in areas where small retailers operate. On the other hand, Hong Kong and Singapore consider small stores and hawkers as an integral part of their economy along with super and wet-markets. Hence the proactive approach to help modernize traditional retailers. The Singapore government introduced a policy 'cherish but upgrade and modernize'. This assisted small retailers in streamlining their operations and becoming a key player in the retail value chain, which in turn helped regulate the prices. The Malaysian government introduced a transformation program for small retail stores (TUKAR) to help modernize 5,000 selected grocery stores across the nation by 2020. Under this program, retail giants Carrefour and Tesco have agreed to be on the advisory board to assist traditional retailers in upgrading their POS and inventory management systems.

Clearly, the retail landscape in Southeast Asia is changing and at a rapid pace. To thrive in this rapidly modernizing and mitigate regulatory challenges, retailers need to optimize supply chains, continually innovate their service offerings, and use the right technology to differentiate as well as stay compliant. The ability of retailers to respond to market demands quickly and satisfy and delight customers has never been more crucial.

Today, both in-store and online retailers gather and leverage customer data to enhance their marketing strategies and improve productivity. While the use of advanced analytics is helping retailers to mine the growing deluge of data, it comes with a bigger responsibility of managing and protecting personal consumer data.

If the biggest data breaches in recent history are anything to go by, theft of retailers' data is not likely to end soon. Large US based retailers such as Target, Michael's and Neiman Marcus have been the victims of data breaches, where hackers stole shoppers' card and personal information from merchant databases. 

 

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