Asia is expected to generate US$4.26 trillion in grocery sales by 2023, almost the same as Europe and North America combined, the food and consumer goods research group IGD reported on Monday.
Asia, the largest regional grocery market in the world, is to grow by a compound annual growth rate of 6 percent over the next five years, IGD said in a news release.
Taiwan is to grow by 4.2 percent annually, behind South Korea’s 4.9 percent and China’s 5.5 percent, but ahead of Hong Kong’s 2.6 percent and Japan’s 0.9 percent, the research group said.
The projection suggests that Asia will add about US$1.14 trillion to the global grocery market over the next five years, with its share of global grocery spending hitting 37 percent, it said.
China, India and Indonesia are to become the biggest contributors to the region’s top-line growth, accounting for 74 percent of new sales during the period, IGD Asia-Pacific head Nick Miles said in the news release.
China is to extend its position as the region’s leading grocery market, although its pace is losing steam, the research group said.
In China, online retailers are to have an increasing influence on the market’s grocery landscape, with partnerships fueling the digitization of retail, it said.
Chinese retailers are shifting their focus from first-tier cities to lower-tier cities, and new concepts for stores with and without personnel are likely to emerge and change the industry, it added.
India, the region’s second-largest market, is to see the fastest growth to 2023, with a compound annual growth rate of 11 percent, it said.
In India, traditional retail continues to make up more than 95 percent of the market.
The 12 million traditional stores are to remain an integral part of the retail landscape, but modern retail chains are expected to expand with a focus on establishing themselves in major cities and urban centers, Miles said.
Online would be one of the most significant modern trade segments, with retailer partnerships improving supply chain and customer reach, he said.
Indonesia, the fourth-largest market, is to grow at a rate of 8 percent to 2023, IDG said.
Traditional trade is to make up 80 percent of the grocery market in 2023, with suppliers and mom-and-pop stores better able to service the segment, it said, adding that convenience store operators would continue to dominate, growing their networks and investing in digital capabilities.
The modernization of traditional trade remains a huge growth opportunity, particularly beyond major cities and across the outer islands, Miles said.
For Asia — a hotbed for innovation and a diverse market landscape — the convenience and online segments are expected to see the greatest investment and fastest growth over the next five years, IDG said.
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