Global grocery markets are likely to generate an additional US$1.9 trillion in sales by 2023, led by Asian countries, according to new research data.
The IGD forecast, based on IMF, World Bank, UN and Oanda base data, predicts Asia will see the strongest real growth – from population growth or consumers spending more on grocery – and is set to account for 47 per cent of the additional spend between 2018 and 2023. The forecast anticipates that nearly half (44 per cent) of extra sales will be created in Asia, which will add more than Africa, Europe and Latin America combined.
Asia as a region will contain seven of the largest global grocery markets by 2023, with a combined market size of US$3.8 trillion.
On growth in Asia, Nick Miles, head of Asia Pacific at IGD said: “China’s grocery market is expected to continue growing over the next five years, establishing itself as the largest grocery market globally. While growth varies between markets across Asia, countries such as India, Indonesia, Pakistan and Vietnam will continue to grow in importance for retailers and suppliers given the large populations, improving levels of GDP per capita and the development of modern trade. Retail partnerships have also in some cases helped retailers accelerate growth ahead of the market, and we expect more of these relationships to emerge and develop over the next year.
“Grocery growth in Asia continues to benefit from a rapidly growing middle class, fast development and adoption of new technology, improved infrastructure and logistics networks, plus improvements to retail standards. Modern trade retailers continue to expand their store networks and improve existing operations.
Meanwhile, traditional trade still plays a role, with mom-and-pop stores modernising their offerings and tailoring services to local communities. In countries like China and India this is being aided by online retailers such as Alibaba and Amazon.
“Across Asia the pace of development and focus of retailing varies by market. However, online is expected to be the fastest growing channel regionally over the next five years,” said Miles.
“Online grocery retailing is already well established in countries like South Korea, Japan and China and we expect the share of sales accounted for by channel in these markets to increase to over 10 per cent by 2023.
While online grocery retailing is growing rapidly across Southeast Asia we expect it to still account for less than 2 per cent of sales in most markets in five years’ time.”