Grocery sales in Asia will amount to $4,264 billion (€3,772 billion) by 2023, which is almost the same as the combined sales of Europe and North America, new market forecasts from IGD have revealed.
The food and consumer goods research organisation has also predicted that the Asian grocery market will achieve a compound annual growth rate of 6% between 2018 and 2023.
China, India and Indonesia will contribute the most to this growth, accounting for 74% of sales by 2023.
The head of Asia-Pacific at IGD, Nick Miles, said, “Asia will continue to extend its position as the world’s largest grocery market over the next five years, contributing more additional sales to the global grocery market than the next three fastest-growing regions in value change terms: Europe, Africa and Latin America.”
Top Five Markets
IGD has also forecast that the top five markets in Asia, comprising China, India, Japan, Indonesia and South Korea, will account for 83% of the region’s grocery sales in 2023, and 78.8% of total growth over the next five years.
Despite a slowdown in growth, China will retain its position as the region’s leading grocery market.
Influencing Factors
Factors that will influence the sector in the country are expansion into smaller cities and the launch of new concepts like unmanned stores.
Miles added, “Online retailers will have an increasing influence on China’s grocery landscape, with partnerships fuelling the digitisation of retail.”
India, the region’s second-largest market, will witness the fastest growth to 2023, with a compound annual growth rate of 11%.
According to Miles, traditional kirana stores, which constitute more than 95% of the retail landscape, will continue to exist. However, modern retail stores are set to grow in major cities and urban centres.
‘Modern Trade Channels’
“Online will be one of the most significant modern trade channels, with new retailer partnerships improving supply chain and customer reach,” Miles pointed out.
In Japan, Asia’s third-largest grocery market, a declining population and low growth in consumer spending will result in a slower CAGR of 1% to 2023.
“Retailers’ core grocery formats will face stronger competition from drugstores, discount and speciality stores selling more food and grocery products,” Miles said.
“Technology and automation will form part of the solution to support the country’s ageing population,” he added.
Indonesia and South Korea are projected to witness a compound annual growth rate of 8% and 5%, respectively, to 2023.
‘Huge Growth Opportunities’
“Asia’s food and consumer goods market possesses huge growth opportunities,” Miles concluded.
“The combination of the largest regional grocery market and strongest real growth prospects of any region means Asia should be on any supplier’s radar for growth,” he added.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
