In 2020, a momentous shift in consumer spending towards online grocery is underway. For legacy grocers to survive the unprecedented onslaught from retail giants such as Alibaba, Amazon, Carrefour, JD.com and Walmart, they must either develop their own omnichannel capabilities or cede their relationships with their customers to hyperlocal delivery partners. Grocery-focused brands must also adapt to the accelerated penetration of online grocery to position themselves for success.
This report comes in PPT.
The penetration of e-commerce into the grocery space has lagged most other retail sectors, but online grocery sales growth is now accelerating markedly as barriers to consumer uptake are rapidly tumbling around the world.
Asia Pacific is by far the most important region of the globe in terms of the online grocery space. Not only does it account for the majority of worldwide sales, it also serves as an innovation hub, pointing the way forward for other regions.
There is not a single defined path to success for online grocery companies. Instead, there are multiple paths for these companies to follow. Online grocery players would do well to embrace multiple business models, as those that can reach the greatest number of consumers are best positioned for the future.
Despite the rapid recent online grocery sales growth, there are still a number of obstacles that are holding back e-commerce penetration in the grocery space. The three most glaring challenges that online grocery companies currently face are high costs, insufficient scale and negative user experiences.
Thanks to the rising availability of internet access, the growing ubiquity of smartphones and the efforts made by online grocery players to streamline their supply chains - which helps to reduce costs - online grocery sales are increasing in emerging markets around the world (albeit from a low base in many countries).
The COVID-19 pandemic has led to an unprecedented surge in online grocery sales around the world. Although some of the shift in consumer spending towards online grocery may prove ephemeral, a significant portion will be permanent.
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.
See All of Our DefinitionsIf you purchase a report that is updated in the next 60 days, we will send you the new edition and data extraction Free!