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Ten global e-grocers poised to witness growth of $227 bn at 20% by ’23

Zoom in font  Zoom out font Published: 2018-11-30  Views: 28
Core Tip: Ten leading global online grocery markets are predicted to experience combined growth of $227 billion, at an annual rate of 20 per cent, by 2023, according to new figures unveiled by IGD at Groceryshop in Las Vegas recently.
Ten leading global online grocery markets are predicted to experience combined growth of $227 billion, at an annual rate of 20 percent, by 2023, according to new figures unveiled by IGD at Groceryshop in Las Vegas recently.

As the global leader in grocery e-commerce, China is expected to grow at a compound annual growth rate (CAGR) of 31 percent over the next five years, taking the market share from 3.8 per cent to 11.2 percent. Over the next five years, the Chinese online grocery market will grow by the same size as the entire combined market of all ten countries in 2018.

IGD also forecast extensive growth in the United States, with online set to more than double its market share, driven by the rapid expansion of pick-up points, Instacart’s expansion and integration of businesses such as Shipt and Home Chef. Market share will grow to 3.5 percent, creating an additional $37-billion opportunity for American retailers and manufacturers.

IGD’s research showed that around the globe, online grocery market growth was being driven by the twin enablers of rapidly evolving shopper expectations and exciting tech innovations. Shopper expectations of price, quality, choice, convenience, speed, personalisation, health, information and empowerment are changing fast, and the online channel is well placed to deliver against these.

Commenting on online growth in Asia, Shirley Zhu, programme director, IGD Asia, said, “China, Japan and South Korea are the Asian markets leading the way in online grocery shopping, and we are seeing significant market share penetration in these three countries. They lead the way globally in terms of market share, and in 2023, all three will be nearing double-digit share for online grocery, with South Korea over 14 percent.”

“The acceleration of online and offline integration has been accentuated by partnerships between e-commerce players and bricks and mortar retailers. Physical retailers in China, having recognised the importance of the online and digital channel, are collaborating with e-commerce and delivery partners to offer more targeted ranges, promotions and expanding their omnichannel presence. It is for this reason that China comes out on top globally with value growth of $145.4 billion predicted by 2023,” she added.

Addressing US online growth, Stewart Samuel, North American programme director, IGD, said, “The US online grocery market has experienced a rapid pace of growth this year, driven by expanding services and new entrants. We’re seeing a major focus on offering same-day delivery with many companies partnering with Instacart to scale up quickly, including Aldi. Target acquired Shipt, enabling it to move its same-day delivery plans forward by about two years.”

“Meal kit companies Plated and Home Chef were acquired by Albertsons and Kroger, respectively, enabling them to offer a multi-channel solution in the category, and we’re also seeing a strong pipeline of innovation including Walmart’s automated picking warehouse, Alphabot, Kroger’s partnership with Ocado and Albertsons’ online organic and natural foods marketplace. With all the developments in the market, and the rate at which retailers are entering the channel and expanding their offers, growth for the next five years is likely to be strong,” he added.

Looking at the online growth opportunity in Europe, Jon Wright, head, retail insight, EMEA, IGD, said, “We’re anticipating continued online growth opportunities across mature Western European markets. In the United Kingdom, France, Germany and Spain, we forecast above market average growth rates for online grocery retailing, all growing market share. It provides a significant growth opportunity as retailers and manufacturers in the region invest in personalisation, ease and convenience and combining online and offline to meet a range of shopper needs.”
 
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