Retail in Asia


Seven key Asian retail markets in 2022 and what’s ahead in 2023

Against the backdrop of an unpredictable virus and its resurging variants, retailers faced some strong economic headwinds in 2022. Despite these unprecedented times, different Retailers across Asia remained resilient and were able to meet consumer expectations and grow.

That is largely due to the fact that the pandemic continues to drive e-commerce growth for retailers as many consumers shop online, i.e. Thailand’s sales of grocery products through online distribution channels have soared since the lockdown period in 2020.

SEE ALSO: Korea retail sales up 7 percent in October, duty-free footfall on the rise

As the end of 2022 is just around the corner, Retail in Asia looked back at this shaky year in retail; rounding up the overall performance of seven key Asian retail markets, including Malaysia, Hong Kong, South Korea, Mainland China, Singapore, Japan and Thailand, as well as overall outlooks in the year ahead.


Source: Omar Elsharawy/ Unsplash

Overall performance: Retail trade in Malaysia has recorded a somewhat rocky recovery in 2022. Retail sales surged 62.5 percent in the country’s second quarter this year, boosted by the Hari Raya festival and the easing of operating restrictions on Covid.  It was recorded to be the softest growth since May, as consumption eased amid rising cost pressures.

What about Q3? In the third quarter, Malaysia’s retail sales grew by 96 percent year-over-year. It should be noted, however, that a majority of retailers suspended their operations during the third quarter last year, which affected the significant rate. This period saw a contraction of 27.8 percent for the industry.

According to RGM, the high growth rate of the quarter was also attributed to strong domestic demand. It is estimated that the fourth quarter of this year will have an average growth rate of 13.9 percent.

2023 outlook: Due to two upcoming major events – Christmas, in December, and Chinese New Year, at the end of January – Malaysian retailers are optimistic that the retail industry will continue to recover by the end of this year.

According to Trading Economics global macro models and analysts’ expectations, Malaysian retail sales will grow 9.5 percent by the end of this quarter. Economists predict Malaysia retail sales year-over-year will trend around -1.2 percent in 2023 and 6.9 percent in 2024.

Hong Kong

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Overall performance: With economic conditions closely related to that of mainland China, the recent quarantine lift undoubtedly spelled good news for both regions. Not only is local spending expected to rise, recovery in the tourism sector is also anticipated to make an overdue return just in time for the holiday season.

What about Q3? Hong Kong retail sales gained in value terms in Q3, as improved tourism from eased pandemic restrictions and the dissemination of a new batch of consumption vouchers spurred spending, according to government data released on December 1.

October retail sales rose 3.9 percent from a year earlier in value terms to total HKD 31.9 billion (USD 4.10 billion), according to the latest figures released by the Census and Statistics Department.

2023 outlook: Looking ahead, a government spokesman pointed out that improved labour market conditions and the ‘Consumption Voucher Scheme’ will continue to provide support to the retail sector, though tightened financial conditions will partly offset the effects. Moreover, consumption-related activities should gradually regain momentum if the local epidemic situation remains under control and the various restrictive measures can be relaxed in an orderly manner, added the official.

South Korea

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Overall performance: Being one of the countries recording the highest number of Covid-19 cases, nothing seemed to have stopped South Korea from making a retail recovery in 2022. Starting off with a 4.5 percent year-on-year increase in January 2022, the country managed to maintain a single digit incline in the following months up until the end of the year.

What about Q3? South Korea retail sales lifted 7.3 percent in Q3, as more people ventured outdoors and demand for various services grew, on the back of eased Covid-19 restrictions. According to data compiled by the Ministry of Trade, Industry and Energy, the combined sales of 25 major offline and online retailers came to KRW 14.66 trillion (USD 10.95 billion) last month, compared with KRW 13.7 trillion a year earlier.

Sales from online platforms jumped 8.2 percent to KRW 7.06 trillion in October, thanks to the continued uptake of contactless shopping, which took-off amid the ongoing pandemic. The growth came as restrictions for international travellers over the pandemic have further eased and outdoor activities increased amid the mild weather, officials said.

2023 outlook: According to Shinyoung Securities’ Seo Jung-yeon, a wholesale and retail analyst, “Amid such uncertainty, the Korean retail industry will see a decrease in sales for food delivery, appliances, furniture, and household goods until the first half of next year due to shrinking consumption.”

Mainland China

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Overall performance: A worsening real estate crisis, Covid-19 restrictions, and the risk of a global recession has held back China’s economic recovery.

However, some aspects of the Chinese economy are particularly promising. In September, industrial production data – a measure of activity in the manufacturing, mining, and utility sectors – showed a sharp rise from the previous year. The Chinese property market downturn has worsened, export growth has slowed further, and consumer spending has declined again after a brief rebound in the summer.

What about Q3? Retail sales experienced a shaky comeback in the third quarter, declining slightly to 2.7 percent in July, before increasing to 5.4 percent in August and then dropping to 2.5 percent once again in September. Several analyses suggest that the trend was partly the result of fluctuations in numbers between June and September that were influenced by macroeconomic conditions and the resurgence of Covid-19 cases. Throughout the first three quarters of 2022, retail sales grew by only 0.7 percent.

2023 outlook: In the long-term, the China retail sales year-over-year are projected to trend around 3 percent in 2023. In light of pandemic-related mobility restrictions, online retail sales are expected to outpace offline retail sales in the near future, while a deceleration in the segment’s market share growth is anticipated. A similar effect was noted in 2021 after the initial pandemic impact.


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Overall performance: As Singapore adjusts to life post-pandemic, the retail market continues to change at an accelerated pace. Since November 2021, retail sales have consistently exceeded the average pre-pandemic sales level of SGD 3.2 billion.

During the final quarter of the year, retail spending will be boosted and supported by key events like 11.11, Black Friday, Christmas, and New Year’s Eve. As tourist arrivals remain stable and Singapore seems to be returning to normalcy following Covid, the retail market is likely to recover sustainably.

What about Q3? Singapore’s economy grew by 4.1 percent year-on-year in the third quarter, down from 4.5 percent in the previous quarter. The jump in retail sales in October comes after September’s 11.3 percent retail sales growth, totalling SGD 3.8 billion, with online sales accounting for 13.9 percent. Excluding motor vehicles, retail sales lifted 16.9 percent in September.

“Barring the re-emergence of fresh Covid-19 or other health-related risks in Singapore and around the region (leading to re-imposition of social and travel restrictions, which is not our base case), we continue to project retail sales to expand by 10 percent in 2022 which implies a more moderate forecast of around 6 percent retail sales growth in 4Q22,” said Alvin Liew, senior economist at UOB Group.

2023 outlook: Global uncertainties are expected to slow Singapore’s economic growth to 0.5 percent to 2.5 percent in 2023, down from the projected 3.5 percent growth this year, according to the Ministry of Trade and Industry (MTI).


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Overall performance: Real GDP growth in Japan should remain positive despite external headwinds in 2022 and 2023. Service consumption has rebounded strongly as a result of reduced border restrictions and normalization of business activities, along with rising employment, which has reached 60.7 million statewide for seven consecutive months.

What about Q3? A weaker yen also weighed on consumer spending in Japan in recent months, resulting in lower retail sales.

High inflation and a softening yen are putting pressure on the third-largest economy, largely due to disruptions in the commodity market resulting from the Russia-Ukraine conflict.

Retail sales in Japan rose by 3.6 percent year-on-year to JPY 38.1 trillion in Q3 2022. Despite an increase in foot traffic at prime shopping districts, higher living costs will dampen discretionary spending among lower income groups.

2023 outlook: There was a slight upgrade in the outlook for Japan for next year, with the economy now forecast to grow 1.8 percent.

Due to Japan’s slow recovery from the pandemic, the Bank of Japan has no plans of tightening policy any time soon. It appears the world’s third-largest economy will continue to make headway with its catch-up efforts in 2022, as it did in September.


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Overall performance: Household spending in Thailand posted positive growth over 2022, continuing the recovery that started in 2021. As Thailand’s entry requirements for international tourists further loosened in July 2022, it is predicted to bring in USD 5.2 billion to the Thai economy, up from USD 700 million when mass tourism was largely stopped owing to restrictions.

What about Q3? The Thai economy contracted in the three months ending September, as a result of Delta-strain outbreaks that caused business lockdowns in Bangkok and other heavily affected provinces.

Thailand’s retail businesses have faced considerable challenges, but some segments have managed to grow amid the crisis, such as convenience stores and e-commerce. Sales of grocery products through online distribution channels soared during the lockdown period in 2020.

However, as a result of a strong recovery in the tourism sector, Thailand’s GDP growth accelerated to 4.5 percent year-on-year in Q322, up from 2.5 percent in Q222.

SEE ALSO: Singapore retail sales gains 13 percent in July

2023 outlook: Future growth will be hindered by high inflation, tightening global monetary conditions, and softening global demand. A rebound in tourism, government stimulus package, as well as upcoming national elections are expected to boost domestic consumption throughout 2023. Consumer purchasing power is also boosted by lower inflation.

After a solid recovery in 2022, Thailand’s retail sector is expected to slow in 2023, but stay positive at 1-5 percent year-on-year.