Food and Drink Internet Retailing in Singapore

PROSPECTS

Singaporeans gradually embrace online grocery retailing

The recent growth in the number of online players selling food and drinks does not reflect actual demand for such products online. Although technologically advanced, local consumers still tend to purchase fresh food and drinks in physical grocery stores, rather than online.

Food and drinks internet retailing proves to be a tricky business in Singapore

Although there is much hype around online retailing, in reality not all concepts are viable in Singapore, especially when food and drinks are involved. One example is showrooming, where physical stores are used to display product ranges to consumers, who later purchase items online.

Limited scope for locker pick-up model

Regarding locker pick-up services when purchasing food and beverages online, Dairy Farm International believes they are only suitable for non-food items since temperature control and freshness are key factors in food and grocery items for consumers. Similarly, FairPrice believes that since its minimum spend limit for free delivery of products is still quite low, consumers would rather choose this option than pick-up their products in locker stations.

COMPETITIVE LANDSCAPE

NTUC FairPrice leverages reputation to dominate food and drink internet retailing

NTUC FairPrice remained the leading food and drink internet retailer in 2018, partially due to the strong brand image it has maintained over the years among the supermarket chain’s huge local clientele. Realising the importance of developing a robust online platform, even for products like food and drinks, NTUC FairPrice revamped its online website FairPrice On in 2018 to include more efficient delivery and an expanded range of products to provide better customer experience.

Refund policy eases consumers’ fears

The unique edge that FairPrice On has is the fact that, if customers are not satisfied with a product they purchase, they can go to any physical FairPrice supermarket to get a refund or exchange. This automatically boosts consumer confidence in purchasing items online they are normally sceptical about like food and drinks.

RedMart tries to assert dominance in food and drinks internet retailing

RedMart has been ramping up efforts lately to compete with other grocery retailers in the online space and ensure that new entrant Amazon does not surpass its sales. As such, RedMart continues to push its online grocery sales at a solid double-digit growth rate, driven by its advanced data analytics, improving supply chain efficiency and expansion of product ranges.

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