Two leading retailers drive online grocery growth in Asia
As online shopping continues to be the fastest-growing channel in Asia’s grocery market, the two biggest players are driving the most growth in online grocery shopping.
International researcher IGD reveals that JD.com and Alibaba are way ahead of the competition, with their combined e-commerce grocery sales growth in value terms outstripping that of the overall market.
With a current value of US$99bn, IGD expects Asia’s online grocery market to nearly triple to US$295bn by 2023, at a compound annual growth rate (CAGR) of 24.4%.
Forecasts show that JD.com’s grocery sales will grow 28.8% by 2023 to reach US$9.8bn and Alibaba’s grocery sales will grow to US$9.5bn, with a CAGR of 25.6%.
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.
The other top 10 online grocery retailers in Asia are Rakuten, Shinsegae, Auchan Group, AEON, Seven & i, Lotte Shopping, Amazon, and Yonghui.
Nick Miles, head of Asia Pacific research at IGD, says: “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."
He added that 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, he explained.
“There are several ways suppliers can capitalise on growth in online retailing, including developing long-term partnerships with retailers in areas such as marketing campaigns and tailored promotions.
"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.
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.”