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Investments in APAC shift focus to online retail

Venture capitalists are looking to capitalise on the growing e-commerce opportunity in the Asia-Pacific (APAC) region, where smartphone use and internet penetration are on the rise.

This is the finding of the latest report from data and analytics company GlobalData, ‘Smart Money Investing in the Retail Industry in Q4 2017’.

Despite a 4 per cent drop in the share of VC funding deals from 49 per cent in the third quarter of 2017, the APAC region still accounted for $420.9 million of the total $937.3 million invested across the globe during the reporting period.

“Venture capitalists are leveraging the growing demand for online retailing, especially in the APAC region,” said Vijay Varma, retail market analyst at GlobalData. “The funding is being utilised by online retailers to broaden their reach and introduce new product categories along with expanding their reach into other countries.”

GlobalData’s analysis on sector-wise investments revealed that the majority of VC funding in APAC is focused on the food and grocery sector, in line with growing consumer preference for packaged foods along with increasing demand for organic/natural products.

GlobalData’s report also showed that M&A activity took a dip in Q4 2017 compared to Q3 2017. The Americas region dominated the M&A deals accounting for 78.5 per cent of the total M&A value in Q4 2017, while the APAC region accounted for less than 1 per cent of the total value.

Geographic and product portfolio expansion were the key motives behind M&A activity for retailers.


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