Asia’s top two online retail platforms are driving overall sales in online grocery shopping – the fastest growing channel in the region’s grocery market, says international consumer goods researcher IGD.
Big-hitters JD.com and Alibaba’s combined grocery sales growth in value terms is outstripping that of the overall market, IGD said in a press release.
With a current value of US$99bn, IGD expects Asia’s online grocery market to grow to US$295bn by 2023, at a compound annual growth rate (CAGR) of 24.4 per cent.
IGD’s forecasts show that JD.com’s grocery sales will grow 28.8 per cent by 2023 to reach US$9.8bn and Alibaba’s grocery sales will grow to US$9.5bn, with a CAGR of 25.6 per cent.
Nick Miles, head of Asia Pacific Research at IGD, said: “The growth of online grocery in Asia will continue to be led by online marketplaces, especially JD.com and Alibaba, with food and grocery products helping to drive up the number of times shoppers use these retailers' platforms.
“Other pureplay retailers, including Rakuten, Amazon and Coupang, are also strengthening their online grocery operations and will increasingly play a more prominent role in the channel.”
Alongside pure e-commerce retailers, Asia’s online grocery market consists of bricks and mortar retailers that are developing their online capability, as well as forming alliances and partnerships to accelerate growth, he said.
“Bricks and mortar retailers are scaling up their online operations and building partnerships with online players, delivery partners, technology companies and payment solution providers. These partnerships are vital for retailers to compete successfully with online marketplaces and online specialists,” Miles explained
There are several ways suppliers can capitalise on growth in Asia’s online retailing, including developing long-term partnerships with retailers in areas such as marketing campaigns and tailored promotions, he added.
“Collaborating across the full chain is also important and suppliers should integrate their systems with retailers’ systems, to access real time data on stock levels and ensure product availability for shoppers,” Miles said.
“Finally, suppliers can really engage in the mobile space by making sure they stay up-to-date with new apps and social media platforms and other programs that are enhancing experiences for shoppers.”