Sales at grocery retailers were back in decline in Asia Pacific in 2022, with the impact of spiking case numbers in China, as it continued to pursue its zero-COVID policy, dragging down the overall regional performance. This followed a strong recovery in 2021, after the falling sales seen in 2020, when the pandemic first hit the region. Grocery retailers are currently expected to see positive growth throughout the forecast period, driven by both small local grocers and modern retailers.
This report comes in PPT.
After China’s zero-COVID policy had proved successful in 2021, when the country’s grocery retailers channel recorded a strong recovery from the pandemic-induced losses seen a year earlier, the year 2022 posed a challenge to the zero-COVID policy, as the highly contagious Omicron variant of the virus spread across the country. This led to multiple lockdowns in cities and regions as case numbers increased, sending grocery retailers back into decline, also negatively impacting the overall Asia Pacific performance in this year.
Despite modern grocery retailers being favoured over wet markets in the pandemic, due to their perceived greater hygiene levels, small local grocers still dominate overall grocery retailers sales in China, as in many other countries in the region. As competition from e-commerce and modern grocery retailers puts pressure on small local grocers to adapt and modernise their operations, they are responding by partnering with e-commerce platforms like Alibaba’s Ling Shou Tong system to improve their digital capability. With Alibaba and JD.com helping to revolutionise traditional small local grocers in China by providing much-needed digital transformation and upgrading of services, mom-and-pop stores can benefit from the latest technologies and digital solutions. The small local grocers network, with its extensive reach, especially in rural areas, can also see these stores act as fulfilment centres for online players, representing a win-win scenario for both sides.
Online giants like Tmall and JD.com and food delivery platforms like Ele.me and Meituan have been investing heavily in their online grocery businesses in recent years – leveraging their digital capabilities and logistics networks to offer fast and convenient delivery to consumers across China. Traditional supermarkets are responding by investing in their own e-commerce platforms and delivery networks or partnering with online players to expand their reach.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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