Consumer packaged goods (CPG) companies in Asia Pacific must fully embrace digital commerce, according to a new report by Accenture.
Failure to do so may lead to them losing out to newer industry players in the battle for about US$340 billion worth of market growth in the region.
Accenture's report also indicate that the consumer goods and services industry will grow by US$700 billion globally by 2020.
About 50% or US$340 billion of this growth will come from Asia, especially from China, Indonesia, India, Singapore and Thailand. China will account for about US$200 billion, or 60%, of the growth in Asia.
"If CPG companies don't take action now, they risk losing out on the new generation of consumers. These companies must couple traditional models with new ones where consumer engagement is digital and one2one, social influence is perceived to be the trustworthy source and shopping is one click away," said Fabio Vacirca, senior managing director in Accenture's Products operating group in Asia Pacific. "The entire sales and marketing ecosystem is changing dramatically on the back of the new generation of consumers and pervasive digital technologies. In Asian markets, the change is faster and in many cases it means leap frogging the traditional models."
Retail sales across Asia Pacific's high growth consumer markets are on course to top US$10 trillion by 2018, and about one-quarter of this amount comes from digital commerce.
However, the digital commerce market in Asia Pacific remains under-penetrated for CPG companies, particularly in the grocery-product category.
Accenture advises these CPG companies to partner with e-commerce platforms to reach new consumers/markets. These companies should also maximise value from cross-border e-commerce and integrate e-commerce initiatives with social platforms to engage consumers and build trust.
"Technology will continue to evolve and influence how consumers shop in the future," said Vacirca. "By better using digital technologies, CPG companies can engage with consumers on a real-time basis, allowing the companies to provide the maximum value within the minimum time. This will, in turn, create opportunities for CPG companies to control the consumer buying experience of tomorrow."
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