How APAC serves as a ‘global pacesetter’ for retail innovation

The region leads globally in integrating digital and physical retail.

The Asia Pacific region is setting the pace for global retail growth and innovation, according to a report from Colliers.
The Global Retail: 2025 Trends & 2026 Outlook Report has found that despite geopolitical uncertainty and tariff risks, the Asia Pacific region remains the global pacesetter for omnichannel, social commerce and tech-enabled retail, with Gen Z and a rapidly expanding middle class driving both e-commerce and in-store spending.

The report, which offers a comprehensive view of how retail markets across the world are adapting to a new era of transformation, found Asia Pacific was leading the way with 5% real retail spending growth, while Europe, the US and Canada show more modest gains of 2–3%.

“Hong Kong’s retail market is showing cautious optimism as consumer confidence stabilizes and tourism continues to recover. While luxury and experiential retail remain strong drivers, brands are increasingly focusing on omnichannel strategies to capture evolving shopper behaviors. We expect steady growth supported by resilient domestic demand and a gradual return of international visitors, with high-street shop rents forecasted to grow by 3%,” said Kathy Lee, Head of Research and Retail Consultancy.

Key highlights from the report include:

• Omnichannel leadership: In APAC, store and online sales are rising rapidly, with online sales nearly doubling that of physical retail. Mobile-first shopping behaviours and younger consumers have accelerated e-commerce adoption while brick-and-mortar continues to expand. APAC leads globally in integrating digital and physical retail, with store-based sales projected to grow 20.4% and non-store sales 43.4% by 2028.
• Gen Z influence: With 47% of the global Gen Z population, APAC drives mobile-first, social commerce and influencer-led retail.
• Social commerce boom: TikTok Shop is thriving, especially in Indonesia, Thailand, Vietnam and Malaysia.
• Middle-class expansion: More than 332 million new middle-class households added in the past decade, with 352 million more expected by 2034.
   

According to the report, in-store retail continues to prove resilient and adaptable in the face of significant market and macro changes. While social commerce and online sales continue to expand, retail real estate is proving to be stable, with renewed investor interest into the sector.

“Retail fundamentals across Asia Pacific continue to strengthen, with resilient consumer demand and improving macroeconomic conditions driving renewed investor confidence,” Kathy Lee, Head of Research and Retail Consultancy said. “As competition for quality assets intensifies, investment activity is gaining momentum especially from cross-border investors, with retail now accounting for 40% of APAC cross-border capital flows, up from just 15% y-y.”

Retail sales across Asia Pacific are expected to remain steady into 2026, supported by positive drivers such as ongoing stimulus measures in mainland China, rising tourist expenditure in Japan and Singapore, and sustained population growth in Australia. Retail spending growth in real terms is projected at 4.5% in Asia Pacific, slightly down from 2025 due to softness in China.

Despite geopolitical uncertainties and tariff risks, tourism recovery, urbanisation and tech-enhanced retail experiences are expected to continue to support steady momentum across markets.