‘Double-digit growth’ ahead for Asian online grocery business
Play
INCREASED mobile accessibility and broadband penetration are disrupting the traditional grocery-buying business model, enabling consumers to purchase groceries anywhere, any time, according to Ericsson.
“We are seeing a ‘uberisation’ of the retail industry in Asia. The outlook has never been more promising,” Markus Bihler, chief executive of HappyFresh, said yesterday.
“Opportunities abound in this region with its sophisticated food-loving consumers, growing wealth and rapid urbanisation. The continued increase in mobile adoption and broadband penetration has helped boost our online grocery sales,” he said.
Mobile penetration in Asia-Pacific excluding China and India reached 110 per cent in the first quarter of last year, surpassing the global average of 99 per cent.
HappyFresh is Southeast Asia’s leading online grocery company. Last year it completed a US$12-million (Bt423 million) Series A funding led by Vertex Venture, the venture arm of Temasek Holdings, and Sinar MasDigital Ventures, the venture arm of Sinar Mas Group of Indonesia.
“Ordering online for home delivery is gaining in popularity in the region. Currently, two out of five online shoppers want to receive real-time offers via their smartphone while they shop.
“We foresee double-digit growth ahead for the online grocery business,” Bihler said.
More consumers are purchasing groceries via digital platforms such as mobile apps. Since its inception, HappyFresh has seen a tenfold increase in the downloading of its mobile app in the region.
The increased popularity of online grocery shopping in Asia has been fuelled by two social developments – traffic congestion and long working hours.
Traffic congestion is a characteristic in most Asian cities, making travelling very stressful. Three Southeast Asian cities – Jakarta, Bangkok and Surabaya – are in the 10 cities with the worst traffic congestion globally, according to a survey by Castrol and TomTom, a Dutch company that produces navigation and mapping products.
Few people want to push their way through a crowded supermarket after a long day at work.
Asian countries also tend to have the longest working hours. They have the highest proportion of people spending more than 48 hours a week at work. This figure is expected to rise as Asia becomes even more affluent.
Consumers ‘selective’
“Customers are also becoming very selective when it comes to quality foods. A Nielsen study shows that today’s shoppers are seeking fresh, natural and minimally processed foods with ingredients that help fight disease and promote good health,” Bihler said.
This presents a tremendous opportunity among niche consumer segments, especially in the healthy-eating space, and other categories that may be more difficult to find on in-store shelves.
Speciality retailers have emerged in the health and wellness space, from national online grocery-delivery services with extensive fresh sections to local produce-delivery services.
Consumers are embracing technologies that enable them to buy groceries with one click rather than having to walk to bricks-and-mortar stores to get what they need, with the average shopping basket growing 66 per cent between the first and third order.
Shopping patterns vary from market to market, according to HappyFresh’s proprietary survey of shoppers across five countries.
Online purchase of groceries peaks at about 5pm on weekdays and 10am on weekends and Monday.
This means that customers enjoy shopping toward the end of working hours, or like to get their shopping done during the weekend or early on Monday so they don’t need to worry about groceries for the rest of the week.
About 75 per cent of online grocery shoppers are 25-44 years old.
Most online grocery shoppers are women.
They place their orders weekly, and fresh produce accounts for half of every order
Working mothers outnumber all other buyers of groceries online. The top five most ordered items are milk, eggs, onions, bananas and baby diapers.
The second-biggest group is young professionals and expatriates, whose top buys are tomatoes, spaghetti, cola and chicken breast.
