IGD predicts big things for online grocery sector
Ten leading global online grocery markets (including China, the USA and UK) will experience combined growth of $227 billion, at an annual rate of 20%, by 2023, according to IGD.
As the global leader in this space, China will grow at a 31% CAGR over the next five years, taking market share from 3.8% to 11.2%. Over the next five years, the Chinese online grocery market will increase by the same size as the entire combined market of all ten countries in 2018.
In the US, meanwhile, online is set to more than double its market share, driven by the rapid expansion of pick-up points, Instacart’s expansion and integration of businesses such as Shipt and Home Chef. Market share will grow to 3.5%, creating an additional $37 billion opportunity for American retailers and manufacturers.
Around the globe, key drivers are the twin enablers of rapidly evolving shopper expectations and exciting tech innovations. Shopper expectations of price, quality, choice, convenience, speed, personalisation, health, information and empowerment are changing fast, and the online channel is well placed to deliver against these.
IGD Asia’s Programme Director Shirley Zhu, says: “China, Japan and South Korea are the Asian markets leading the way in online grocery shopping, and we’re seeing significant market share penetration in these three countries. They lead the way globally in terms of market share, and in 2023 all three will be nearing double digit share for online grocery, with South Korea over 14%.”
“The acceleration of online and offline integration has been accentuated by partnerships between e-commerce players and bricks and mortar retailers. Physical retailers in China, having recognised the importance of the online and digital channel, are collaborating with e-commerce and delivery partners to offer more targeted ranges, promotions and expanding their omnichannel presence. It’s for this reason China comes out on top globally with value growth of $145.4 billion predicted by 2023.”
