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M<br />
FOUNDATION<br />
Exhibit 23:<br />
Adoption of Internet retailing for electronics is high among most countries...<br />
39% 39%<br />
33%<br />
2017 Electronics and appliances<br />
retail online penetration (%)<br />
29% 27% 26%<br />
19%<br />
Exhibit 24:<br />
...while online penetration for fashion (apparel and footwear) is a mixed<br />
bag<br />
48%<br />
27%<br />
2017 Apparel and footwear<br />
retail online penetration (%)<br />
USA<br />
China<br />
UK<br />
Russia<br />
Indonesia<br />
Brazil<br />
France<br />
12%<br />
S.Korea<br />
9%<br />
Japan<br />
8%<br />
Australia<br />
5%<br />
Thailand<br />
2% 2%<br />
Singapore<br />
Malaysia<br />
22% 19% 18% 16% 14% 14%<br />
9%<br />
5% 4% 4%<br />
China<br />
USA<br />
UK<br />
Australia<br />
S.Korea<br />
Russia<br />
Source: Euromonitor, Morgan Stanley Research<br />
France<br />
Japan<br />
Singapore<br />
Thailand<br />
Brazil<br />
Malaysia<br />
1%<br />
Indonesia<br />
Source: Euromonitor, Morgan Stanley Research<br />
Every spring since 2010 Morgan Stanley's UK retail team has commissioned<br />
a 1,000-person consumer survey, focused on apparel<br />
retailing. The surveys have consistently shown two main reasons<br />
why those who still do not buy any of their apparel online choose not<br />
to:<br />
Exhibit 25:<br />
The main barrier for those who never shop for clothing online appears<br />
to be concerns around product fit<br />
I am not sure the items I buy will be genuine 1%<br />
Home deliveries time consuming & inconvenient 2%<br />
Do not like sharing my details on the web 3%<br />
I am not sure about my refund or replacment rights<br />
4%<br />
l<br />
l<br />
Either they like to try products on...<br />
...or they are concerned about how well the items would fit.<br />
I haven't got anywhere to go if I want to complain<br />
I don't like the hassle of arranging returns<br />
I like to have things straight away and not wait for delivery<br />
4%<br />
5%<br />
7%<br />
It is less fun to shop on the web<br />
9%<br />
It is not surprising, then, that for global online apparel retailers,<br />
40-50% of the products ordered being sent back is the norm. If the<br />
customer returns a purchase then delivery costs are effectively<br />
"sunk." The retailers have to incur reverse postage costs and then<br />
have to process the returned garment and make it saleable stock.<br />
Enjoy browsing & shopping in real stores<br />
12%<br />
I don't know if the items will suit me in fit, size or look<br />
22%<br />
I like to try items before I buy<br />
32%<br />
0% 5% 10% 15% 20% 25% 30% 35%<br />
Proportion of respondents who have never purchased clothing online citing:<br />
Source: AlphaWise, Morgan Stanley Research (May 2018<br />
MORGAN STANLEY RESEARCH 25
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