UK is biggest online grocery market after China

By Michael Stones

- Last updated on GMT

Online grocery sales are clicking with more British shoppers
Online grocery sales are clicking with more British shoppers

Related tags Online grocery Supermarket Retailing

The UK’s online grocery market – valued at £9.57bn a year – is the globe’s second largest after China and is poised for further rapid growth, predicts the grocery think tank IGD.

UK online grocery sales are forecast to reach £17.2bn by 2020, partly driven by new, innovative sales platforms.

“This is being driven by shopper demand as well as new retailer innovations to make buying groceries online more convenient,”​ said IGD chief executive Joanne Denney-Finch. “The UK has always been a leader in online grocery, with both retailers and shoppers keen to embrace new technology, and we expect this to continue.”

Three out of 10 Britons bought their groceries online in the past month, with one in nine buying most of their groceries on the web, according to the IGD research. Time-pressed shoppers were increasingly using mobile technology, driving global demand for online grocery shopping.

Three out of 10 bought groceries online

Convenient click and collect services were continuing to evolve, including fully-automated 24-hour pick-up points with more pick-up locations at places such as petrol stations.

Home delivery was also said to be receiving a boost from lower priced delivery slots and delivery passes, plus shorter delivery windows including same day, leading to more frequent orders.

Worldwide, further growth was predicted across the all of the top 10 online grocery markets. “This is being driven by busy shoppers making the most of more digital technologies and the rising trend of ‘anywhere, anytime shoppers’,” ​said Denney-Finch. See the world's top online markets in the box below.

UK online sales surge

  • Online grocery sales worth £9.57bn
  • Sales to hit £17.2bn by 2020
  • Three out of 10 Britons bought groceries online in past month

“They add to their online shopping basket over a period of time on whichever device is most handy at that moment. New innovations, such as grocery delivery services from Instacart and Uber, are also helping to support online’s rapidly increasing popularity by providing convenient time-saving solutions.”

The world’s leading online grocery market of China has sales valued at £26.19bn. But sales were predicted to rocket five-fold by 2020 to reach £113.68bn.

The Chinese online grocery market was maturing rapidly and will significantly dwarf other countries by 2020, said the IGD. Growth will be powered by greater access to the internet, both through smartphones and other devices.

‘Instant access to new customers’

“Most online sales in China take place through digital marketplaces, such as Alibaba’s business to consumer site Tmall,”​said the IGD boss. “These allow international retailers without stores in China to gain instant access to new customers and tap into the booming Chinese market with limited investment.”

Food was seen as an affordable luxury, with foreign brands popular with Chinese shoppers wary of the safety scares surrounding locally sourced food and drink. To cater for this demand, companies such as Alibaba and Amazon have recently introduced dedicated sites for imported goods.

“Many Chinese people also prefer shopping using their smartphones, so retailers are offering mobile-only promotions which are updated regularly to encourage shoppers to keep visiting their websites for the latest deals.”    

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