Supermarkets in Hong Kong, China

PROSPECTS

Growth in online grocery sales hindered by low delivery outreach

With Hong Kong’s developed telecommunication infrastructure and high mobile penetration rates, many consumers demonstrated a higher level of interaction with online platforms, including those set up by supermarkets. The accessibility of online grocery stores has further given rise to the popularity of online shopping for groceries.

Players focus on establishing own sourcing channels

Over the forecast period, players are expected to invest heavily in developing their own sourcing channels through establishing partnerships directly with suppliers and removing the need to work with distributors. In 2018, an increasing proportion of staple grocery items such as eggs and beverages in supermarkets were sourced directly from oversea suppliers, bypassing the middleman.

Supermarkets to increasingly concentrate on premium products

Over the forecast period, supermarkets in Hong Kong are expected to shift from offering an extensive range of low-priced products in large store layouts to offering premium products in smaller stores to meet the rising demand for high-quality products. With families in Hong Kong becoming smaller, consumers now find that they have more available income to spend on higher quality groceries and as such are willing to pay a premium for high-quality, imported products.

COMPETITIVE LANDSCAPE

Wellcome and ParknShop dominate supermarkets

Wellcome and ParknShop continued to be the leading supermarkets in 2018, ranking first and second respectively in terms of value share. Wellcome and ParknShop’s stores account for more than 50% of supermarket outlets in Hong Kong, making them highly accessible and visible to consumers.

Market Place by Jasons records strongest value growth in 2018

In line with the rising demand for premium products, brands with a wide selection of premium and imported products performed well in 2018. Market Place by Jasons, among other high-end supermarket brands, registered the fast current value growth in 2018, benefitting from the premiumisation trend.

Economy supermarkets remain relevant

Despite the rising popularity of high-end supermarkets offering premium products, economy supermarkets are expected to remain resilient over the forecast period. They offer a wide range of grocery items such as spreads, ready-to-use sauces, pasta, rice, juice, canned food, snacks and confectionery at affordable price points.

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