Ten leading global online grocery markets are predicted to experience combined growth of $227bn, at an annual rate of 20%, by 2023, according to new figures unveiled by IGD today at Groceryshop in Las Vegas.
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Source: IGD research 2018
As the global leader in grocery eCommerce, China will grow at a 31% CAGR over the next five years, taking market share from 3.8% to 11.2%. 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 forecasts extensive growth in the US 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%, creating an additional $37bn opportunity for American retailers and manufacturers.
IGD’s research shows that around the globe, online grocery market growth is 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, IGD Asia’s Programme Director Shirley Zhu said: “China, Japan and South Korea are the Asian markets leading the way in online grocery shopping, and we’re 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%.
“The acceleration of online and offline integration has been accentuated by partnerships between eCommerce players and bricks and mortar retailers. Physical retailers in China, having recognised the importance of the online and digital channel, are collaborating with eCommerce and delivery partners to offer more targeted ranges, promotions and expanding their omnichannel presence. It’s for this reason China comes out on top globally with value growth of $145.4bn predicted by 2023.”
Addressing US online growth, IGD’s North American Programme Director Stewart Samuel 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.
“Plated and Home Chef meal kit companies 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.”
Looking at the online growth opportunity in Europe, Jon Wright, Head of Retail Insight EMEA at IGD, said: “We’re anticipating continued online growth opportunities across mature Western European markets. In the UK, 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.”
For additional insights into the online channel, visit retailanalysis.igd.com
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Notes to editors:
- IGD is a not for profit research and training organisation. It has a trading subsidiary that provides commercial insight services for the consumer goods industry. The profits from these commercial services fund our not for profit activities.
- IGD’s channel forecast model draws on an analysis of individual retailer performances, combined with our proprietary global grocery market sizes . Our retailer and supplier relationships enable us to get to know markets from the ground up, and we build our insights through our global research and travel programme. Our field research is backed-up by a comprehensive desk-based research programme. Insights are taken from a wide range of sources, including company reports, releases & filings; analyst briefings and research notes; regulatory bodies and global news services.
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Alexandra Crisp on [email protected] or +44 7590 183295