Saturday, April 20, 2024

Can Amazon challenge Woolies’ and Coles’ online domination?

As online grocery shopping surges, Woolies and Coles enjoy an 85 per cent stranglehold on the Aussie market. But can the great disruptor, Amazon, loosen their grip?

For online grocery shopping in Australia, it seems, the only way is up. Or so says Nielsen’s just-released quarterly Grocery Ecommerce Report.

According to the report, online grocery shopping is up 39.7 per cent in value sales during the 12 months to October 2018 compared with the previous year. This figure is well ahead of the total grocery market, which grew in value sales by 2.7 per cent in the same period.

The report reveals that online grocery is carving out an ever-greater share of the Australian grocery market. In fact, it has gained one percentage point to reach 3.8 per share of total grocery dollar sales.

Here comes Amazon

Coles and Woolworths currently dominate this online space, accounting for roughly 85 per cent of total online grocery value sales.

But Nielsen predicts that Amazon’s high profile, coupled with its expansion of grocery categories, could soon shake things up.

Head of Retail at Nielsen Alfredo Costa said, “The online grocery landscape is likely to continue its rapid growth as Australians get more comfortable with the experience and certainly as Amazon expands its offering.

“Household brands from across dry grocery categories, such as biscuits, cereals and confectionery, are now available for purchase via Amazon, as is a range of health and organic items, which may attract customers looking for specialty items they may not have seen in their local bricks-and-mortar stores.

“These weeks leading up to Christmas will undoubtedly see a surge in new shoppers’ trialling online grocery stores for their ‘big shop’ during this busy period.”

Consumer awareness evenly spread

A Nielsen survey in September 2018 found that consumer awareness of the three big players was neck and neck:

  • 90 per cent of respondents were aware of Amazon.
  • 93 per cent were aware of Coles.
  • 94 per cent were aware of Woolworths.

Industry experts and commentators continue to keep a close eye on Amazon’s evolving place in the Australian retail landscape.

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