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Carl Collen

BY CARL COLLEN

Asia's online grocery moves at "rapid pace"

Online grocery in Asia is set to grow 198 per cent to US$295bn by 2023, according to IGD

Asia's online grocery moves at "rapid pace"

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Online grocery in Asia is developing at a rapid pace, with the market set to grow from its current value of US$99bn to US$295bn by 2023, according to the latest forecast from international researcher IGD Asia.

By 2023, IGD expects online grocery sales across Asia’s top 12 grocery markets to grow to US$295bn, a 198 per cent increase, representing a CAGR of 24.4 per cent, compared to 6.2 per cent for the overall grocery retail market over the same period – making online the fastest-growing format in the region

IGD forecasts that online will account for 7.6 per cent of total grocery retail sales in Asia by 2023, more than doubling its current market share

“The penetration, size and growth of online grocery varies greatly by country," explained Shirley Zhu, programme director at IGD Asia. "South Korea, China and Japan will be the most established online grocery markets in terms of both market share and scale, while Singapore and Taiwan will also have well-developed online grocery channels by 2023, benefiting from existing infrastructure and retailer investment.

"Markets in Southeast Asia will see some of the fastest growth, but the market share of online grocery here will remain small," Zhu added. "Markets such as India and Indonesia will also become increasingly important due to their scale."

According to Zhu, South Korea will remain Asia’s most advanced online grocery market, with its share growing to 14.2 per cent by 2023, fuelled by the country’s increasing number of single-person households and the steady rise of mobile shopping.

“However, despite South Korea maintaining a higher online grocery market share in 2023, China will strengthen its position as Asia’s largest online grocery market, with sales set to reach US$205bn," she continued. “Japan will also see online grocery sales strengthen further but, as with South Korea, growth will be relatively slow compared to other markets in the region.

“Meanwhile, Singapore will firmly establish itself as the most advanced online grocery market in Southeast Asia."

India grocery sales are forecast to grow rapidly over the next five years from a very low base, due to a combination of retailer investment, better infrastructure, new payment solutions and a large population, while online is the fastest-growing channel in Taiwan’s grocery retail market and the trend is expected to continue.

“Asia’s online grocery channel clearly provides huge opportunities for suppliers over the next few years, but there are a number of things they need to consider," Zhu noted. "The first is prioritising where to invest – the size and growth of each market varies significantly, so suppliers should be prepared to make choices and have a dedicated strategy for each country.

“Suppliers should also evaluate their products, packaging and supply chains in each market to make sure they are ready for the opportunity," she added. "As online retailers expand across the region and form more partnerships with bricks and mortar retailers, getting to know these companies will become the key to winning online. New innovations around mobile, delivery and payment are also emerging all the time, so suppliers should keep a very close eye on these rapid developments.”

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