FDBusiness.com

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

 Breaking News
  • AB InBev to Sell Australian Business For US$11.3 Billion to Asahi Group Anheuser-Busch InBev has agreed to divest Carlton & United Breweries (CUB), its Australian subsidiary, to Asahi Group Holdings for Au$16.0 billion, (US$11.3 billion) in enterprise value. The transaction represents an implied multiple of 14.9x 2018 normalised EBITDA. As part of this transaction, AB InBev will grant Asahi Group Holdings rights to commercialise the portfolio of AB [...]...
  • UK Spirits Boom Shows No Signs of Slowing Spirits producers across the UK are gearing up to dramatically increase production over the next 12 months amid signs that the boom in UK spirits is set to continue, according to research conducted by a campaigning alliance that has just been launched. A poll by Survation for the newly-established UK Spirits Alliance has found that 65 [...]...
  • Mondelēz International Completes Acquisition of Majority Interest in Perfect Snacks Mondelēz International has completed its acquisition of a majority interest in Perfect Snacks®, a pioneer in the fast-growing refrigerated nutrition bars segment with a range of offerings including Perfect Bar, The Original Refrigerated Protein Bar™, and Perfect Snacks’ other lines of organic, non-GMO, nut-butter based protein bars and bites. “The Perfect Snacks majority acquisition further expands [...]...
  • Interim Revenue and Profits Up at Nichols Nichols, the UK-based soft drinks group, has reported a 10.2% increase in revenue to £71.6 million and a 2.0% rise in profit before tax to £13.3 million for the half year ended 30 June 2019, compared to the corresponding period in the previous year. EBITDA increased by 9.7% to £15.3 million. To support the trading [...]...
  • First Milk Announces Proposed Changes at Scottish Creameries First Milk, the UK dairy co-operative, has announced the commencement of employee consultation about proposed changes at its Scottish Creameries. The Scottish Creameries were put up for sale in April 2018 when First Milk announced that its Campbeltown and Arran Creameries were not core to its business strategy for the future. Despite significant effort over the [...]...

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

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • October 17, 2019Future Food-Tech
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements