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Tetra Pak report focuses on rise and challenges of Thai online grocery sector

Aug 07. 2018
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By The Nation

Tetra Pak Thailand, the local unit of the world’s leading food processing and packaging solutions company, on Tuesday released the 11th annual edition of the “Tetra Pak Index”.

This year’s report focuses on the rise of online grocery and the unique challenges it presents for the food and beverage industry. 

It highlights the insights into the new omni-channel world where smart packaging plays a major role in creating new business opportunities.

In Thailand, the online grocery sector is estimated to grow five-fold by 2030 based on current projections. 

In light of this forecast, the issues of speed, personalisation and uniqueness, as well as convenience and environmental friendliness, become particularly important.

Ratanasiri Tilokskulchai, marketing director at Tetra Pak Thailand, said the Thai grocery market place has been facing challenges this year, with the overall fast-moving consumer goods (FMCG) market declining by 2 per cent. 

At the same time, online grocery shopping, although still only a small piece of the market, keeps growing and already plays a significant role in the industry.

“Tetra Pak Index forecasts that the online grocery segment will grow by 17 per cent worldwide from 2017-2022. At the same time traditional grocery outlets, such as supermarkets and convenience stores, will continue to play a major role in the market, but with a much slower growth rate of only 2-5 per cent. 

“The main reason for this difference is that consumers now look for the most convenient channels which let them make purchases anytime and anywhere by using their smartphones. Bangkok, in particular, is one of the world’s leap-frogging pioneers in the online grocery business, with the market estimated to grow from 1.1 per cent in 2016 to 5.7 per cent by 2030,” she said.

Ratanasiri highlighted four major trends for brands to consider in terms of product development to keep up with these challenges.

First, convenience is the main driver for online consumers, as time-crunched shoppers look for new ways to make their lives easier. 

Key opportunities include easy-to-use products which are convenient to consume, keep and transport.

Second, sustainability is an area that greatly influences consumers’ brand choices. Nowadays people show increased interest in the entire process, from how raw materials are selected to how products are recycled. 

Consumers also want to know how brands commit to protecting the world.

Third, personalisation and uniqueness is key to customising the shopping experience. Getting consumers to purchase items online without first seeing and trying them in person creates a challenge which can be addressed through high-quality attractive packaging. 

Great packaging not only helps to stimulate trial purchases, but also give the fun unboxing experience which may lead to further purchases.

Fourth, technology and performance, such as packaging tracking systems, will become a critical factor in boosting efficiency in online grocery logistics. 

This is crucial, because logistics become increasingly complex as consumers shift towards buying more frequently but in smaller amounts. 

The use of robotics, artificial intelligence and data processing are all parts of the solution which is aimed at transforming the supply chain. 

Another important element in the online grocery space is smart packaging, which uses codes to communicate with consumers, the marketing director said. 

Radio Frequency Identification (RFID) or QR (Quick Response) codes can be read by small scanners or mobile phones.

“Smart-packaging features allow brands to connect and provide positive consumer experience, which is a key factor in the online grocery shopping. Sharing important information such as production materials, nutrition facts, current promotions and environmental initiatives is only one example of how smart packaging can be used. 

“It opens up all kinds of possibilities for strategic communications and creating a sustainable relationship with consumers in the future,” Ratanasiri explained.

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