What: Asia's retail landscape is undergoing a fundamental transformation in 2025, driven by digital innovation, changing consumer behaviors, and strategic market expansions.

Why it is important: This transformation reflects a broader shift in global retail dynamics, where Asian markets are leading innovation while traditional retailers reinvent themselves to meet new consumer demands.

The Asian retail sector is experiencing unprecedented evolution, with traditional boundaries between physical and digital commerce increasingly blurring. Foodpanda's expansion to 130 cloud stores across 11 markets exemplifies the rapid growth of quick commerce, while Levi's strategic focus on premium offerings and women's apparel demonstrates how established brands are adapting to changing consumer preferences. The transformation is particularly evident in emerging markets, with India attracting 27 new international brands in 2024 and Thailand positioning itself as a luxury retail powerhouse.

Major players like Central Retail are investing heavily in technological integration, implementing smart retail solutions and enhanced digital capabilities. This shift is supported by changing consumer behaviors, with 63% of shoppers prioritizing environmental impact and 90% valuing AI-driven personalization. The landscape is further shaped by strategic partnerships and cross-border expansions, as demonstrated by Korean retail giants Lotte and Shinsegae's aggressive moves into Southeast Asian markets.

IADS Notes: Recent developments in Asian retail underscore this transformation. In February 2024, Central Retail announced a USD 665 million investment in AI integration and ecosystem development, while November 2024 saw MM Mega Market commit USD 20 million to Vietnam's expanding market. The evolution of consumer behavior is evident in the luxury sector, where experiential retail has gained prominence, with 68% of Chinese consumers increasing wellness-related spending. This shift is complemented by technological adoption, as seen in January 2025 when Korean retail giants began transforming their spaces to emphasize experiential retail and entertainment, demonstrating how established players are adapting to new market dynamics while maintaining their competitive edge through innovation and strategic partnerships.

Asian Retail Outlook 2025