Tuesday, June 25, 2024

Online grocery markets set for rapid growth

Online grocery markets will grow by 20 per cent every year until 2023, according to new research by IGD.

IGD, which describes itself as a “research and training charity”, says the “twin enablers” of rapidly evolving shopper expectations and tech innovations are driving this growth.

In fact, says IGD, the ten leading global online grocery markets will experience combined growth of $227 billion by 2023.

The research goes on to make more detailed predictions about a range of global markets.

China leading the way

As the global leader in grocery e-commerce, China will grow at a 31 per cent CAGR over the next five years, says IGD. This growth will boost its market share from 3.8 per cent to 11.2 per cent.

“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,” IGD Asia’s Programme Director Shirley Zhu said. “It’s for this reason China comes out on top globally with value growth of $145.4 billion predicted by 2023.”

US to double market share

Online grocery is set to double its market share in the US, predicts IGD. Drivers of this growth include the rapid expansion of pickup points, Instacart’s expansion and integration of businesses such as Shipt. Market share will grow to 3.5 per cent, says IGD, creating a further $37 billion opportunity for retailers and manufacturers.

“The US online grocery market has experienced a rapid pace of growth this year,” IGD’s North American Programme Director Stewart Samuel said. “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.”

Online growth to continue in Europe

“We’re anticipating continued online growth opportunities across mature Western European markets,” Head of Retail Insight EMEA at IGD said. “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.”

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