China’s Online Grocery Market to More than Double by 2020

 Breaking News
  • European Commission Clears Bayer’s Acquisition of Monsanto The European Commission has approved under the EU Merger Regulation the $62.5 billion acquisition of Monsanto by Bayer. The merger is conditional on the divestiture of an extensive remedy package, which addresses the parties’ overlaps in seeds, pesticides and digital agriculture. Commissioner Margrethe Vestager, in charge of competition policy, says: “We have approved Bayer’s plans to [...]...
  • Management Plan to Fortify Fishing Sector in Western Mediterranean Sea The European Commission has proposed a multi-annual plan for fish stocks in the western Mediterranean Sea. The proposal covers demersal fish stocks, ie fish that live and feed at the bottom of the seabed, and bring a significant income to the fisheries sector in the region. According to the latest data, it is estimated that in 2015, [...]...
  • Major International Summit in Belfast to Tackle Escalating Problem of Food Integrity Food-security experts from all over the world will converge on Belfast from 28-31 May 2018 for a major Summit on how to feed a growing global population – amid massive challenges such as climate change, Brexit, labyrinthine food-supply chains and food fraud on a global scale. The Belfast Summit on Global Food Integrity will be chaired by Professor Chris Elliott [...]...
  • Cargill’s Launches De-oiled Rapeseed Lecithin Products In response to growing consumer demand for label-friendly ingredients, Cargill is introducing a new range of de-oiled lecithin products to complete its portfolio of GMO and non-GMO lecithin products.  A first to market in Europe, Cargill’s de-oiled rapeseed lecithin products help bakery and snacks manufacturers deliver the recognizable ingredient label that consumers want, at an [...]...
  • Tetra Pak Scoops Top Award For Manufacturing Excellence Tetra Pak’s packaging material factory in Izmir, Turkey, has received the world’s top award for manufacturing excellence. In doing so, it becomes only the 22nd factory worldwide to win the prestigious award in more than 40 years. Appraised by the Japan Institute of Plant Maintenance​, the World Class Total Production Maintenance (TPM) Award is presented to facilities that [...]...

China’s Online Grocery Market to More than Double by 2020

China’s Online Grocery Market to More than Double by 2020
April 26
09:45 2017

Online grocery in China could more than double in growth between now and 2020, according to figures released by international grocery research organisation IGD, with its current 3.1% share of the country’s total grocery market forecast to leap to 6.6% over the next three years.

Driven by the growth of the internet, greater smartphone usage, more focused investment from retailers and shifting demographics, IGD forecasts online grocery in China to grow by almost 32% year on year by 2020.

Shirley Zhu, Asia Programme Director at IGD, explains: “China already has the world’s largest online grocery market in terms of value and this certainly shows no signs of slowing down. Last year, 3.1% of all China’s grocery sales were conducted online, a figure we believe will increase to 6.6% by 2020 – a compound annual growth rate (CAGR) of 31.8%. Set against our forecast CAGR of 5.9% for China’s total grocery market over the same timeframe, the size of the opportunity for retailers looking to trade online is clear.”

This growth is being driven by a combination of factors, according to Shirley Zhu. “Internet and smartphone usage is growing across China, while the country’s demographics are changing too – there is a rising population of young, middle-class shoppers leading busier lives. In turn, this is creating an aspirational class of shoppers who want access to grocery products at the click of a button, and who are also increasingly looking to source international goods. Clearly, retailers have been responding to these trends, with lots of players looking to grab a slice of the action.”

A combination of online ‘marketplaces’ and bricks and mortar retailers make up China’s leading online grocery players, according to IGD. Shirley Zhu explains: “Alibaba’s Tmall and JD.com are the two of the largest online retailers in China and they also have a strong position in online grocery. These platforms are a one-stop shop for all domestic and international brands and categories, as well as offering a nationwide logistics network, rapid delivery, innovative and simple payment solutions, and new technologies such as drones and virtual reality.

“These platforms are also increasingly delivering cross-border opportunities, both selling international products in China, but also selling globally, enabling lots of international retailers to enter the Chinese market through them. We’re also seeing marketplaces like Alibaba and JD investing in bricks and mortar stores.

“Other key online grocery retailers in China include Walmart via JD.com and Sun Art Retail, which sells via multiple platforms. There are also lots of other retailers investing in online – for example, Bee Quick, which focuses on fresh products, can deliver to its shoppers within an hour in the 14 cities in which it operates, while Carrefour launched in April 2016 and is extending its service to more cities.”

As the majority of people in China access the internet via their smartphone, getting mobile commerce right is critical for grocery retailers looking to sell online in China, according to Shirley. “Thinking mobile first is vital. Many retailers are rolling out apps offering exclusive discounts and special features, while other apps allow for easy e-payment solutions that allow people to shop online. Brands and retailers are also advertising and have shops set up on WeChat, China’s biggest social media network.

“Indeed, as China’s online grocery channel continues to grow, we expect to see more partnerships created between retailers and manufacturers. We also expect to see online grocers personalising their offers, using data to understand how and when people shop online, to deliver a better service and even personalised products. We also expect innovations such as voice-activated technology, virtual reality and smart devices to play a greater role as the market develops,” Shirley Zhu adds.

About Author



Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • March 28, 2018FOOD INDUSTRY
  • April 4, 2018The leading event for the snack and food-on-the-go market
  • April 5, 2018Slow food The forum for good taste
  • April 10, 2018EXPO XXI Warsaw International Expocentre
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here