“As China’s online grocery channel continues to grow, we expect to see more partnerships created between retailers and manufacturers,” said grocery think-tank IGD Asia programme director Shirley Zhu.
“China already has the world’s largest online grocery market in terms of value and this certainly shows no signs of slowing down.”
More focused investment
IGD forecasted that China’s online grocery market share would jump from 3.1% of the country’s total grocery market to 6.6% by 2020. Growth of the internet, greater smartphone usage, more focused investment from retailers, and shifting demographics were driving online grocery growth, IGD said.
What’s driving growth?
- Changing demographics
The rising population of young, middle-class shoppers leading busy lives was creating a new generation of shoppers that wanted to access groceries at the click of a button, said Zhu. Retailers were responding to those trends, she added.
“Thinking mobile first is vital,” Zhu said. “Many retailers are rolling out apps offering exclusive discounts and special features. Brands and retailers are also advertising and have shops set up on WeChat, China’s biggest social media network.
“We also expect to see online grocers personalising their offers, using data to understand how and when people shop online, to deliver a better service and even personalised products. We also expect innovations such as voice-activated technology, virtual reality and smart devices to play a greater role as the market develops.”
Meanwhile, food and drink manufacturers were urged to protect their intellectual property rights before exporting overseas by trademark attorney Aidan Clarke this week. Clarke warned food businesses risked having their products copied by domestic manufacturers when entering new markets.
Chinese online grocery market – at a glance
- Predicted to double by 2020
- Total grocery market share to increase to 6.6%
- Manufacturers to partner more with retailers