ANN GABRIELLE DOMINGO

Why micro-retail is the way to go to reach Southeast Asian shoppers

- 

Despite their unassuming setups, these family-run stores are a force to be reckoned with. According to a 2023 report by Dal make up 73% of Southeast Asia's grocery retail market. The resiliency of these micro-retail stores came into full display after the pandemic.

Whilst hypermarkets saw a 4% decline and supermarkets only grew by 2% from 2018 to 2022, smaller formats took the lead with a 7% annual growth rate within the region. Even when the month-on-month (MoM) inflation rate in the Philippines rose to 6.6% as of April 2023, sari-sari stores still achieved a MoM of 14.4%.

Supermarkets and hypermarkets, defined as "modern trade" by BCG, have actually long been aware of the staying power of micro-retail in the region, establishing their own minimarkets to reach Southeast Asian shoppers. This strategy was proven successful in the past few years: smaller formats now make up -73% of the total modern trade market in Indonesia and -58% in share of Thailand's modern trade as of 2022.

Whilst currently lagging behind, major retailers in other Southeast Asian countries are aiming to catch up through efforts such as the Philippines' SM Supermarkets continued expansion of its minimart chain Alfamart.

An ode to the neighbourhood store