Online grocery market to grow to $4.2bn by 2023
Australia’s online grocery market is predicted to grow to $4.2 billion by 2023, according to figures released by IGD today. Over the next five years Australia will grow at a 15.3 per cent CAGR, taking market share from 2.1 per cent to 3.7 per cent.
IGD predicts that ten leading global online grocery markets will experience combined growth of $227 billion, at an annual rate of 20 per cent in that time frame.
Australia’s growth pales in comparison to China which comes out on top globally with value growth of $145.4 billion predicted by 2023. The global leader in grocery e-commerce will grow by 286 per cent and account for 11.2 per cent of the total Chinese grocery market.
IGD Asia’s programme director Shirley Zhu said that China, Japan and South Korea are the Asian markets leading the way in online grocery shopping
“They lead the way globally in terms of market share, and in 2023 all three will be nearing double digit share for online grocery, with South Korea over 14 per cent.”
Zhu said that physical retailers in China are recognising the importance of digital channels and are forming digital partnerships to offer more targeted ranges and expand their omnichannel presence.
The UK’s online grocery market will grow by 51 per cent by 2023 and account for 7.9 per cent of the total UK grocery market with online growth opportunities anticipated across mature Western European markets.
Jon Wright, head of retail insight EMEA at IGD, said: “In the UK, France, Germany and Spain we forecast above market average growth rates for online grocery retailing, all growing market share. It provides a significant growth opportunity as retailers and manufacturers in the region invest in personalisation, ease and convenience and combining online and offline to meet a range of shopper needs.”
Extensive growth is forecasted for the US with online set to more than double its market share to 3.5 per cent, creating an additional $37bn opportunity for American retailers and manufacturers. This growth has been driven by the rapid expansion of pick-up points, Instacart’s expansion and integration of businesses such as Shipt and Home Chef.
IGD’s North American Programme Director Stewart Samuel said the US online grocery market has experienced a “rapid pace of growth this year”.
“We’re seeing a major focus on offering same-day delivery with many companies partnering with Instacart to scale up quickly, including Aldi. Target acquired Shipt, enabling it to move its same-day delivery plans forward by about two years,” Samuel said.
The research shows that global online grocery market growth is being driven by “the twin enablers of rapidly evolving shopper expectations and exciting tech innovations”.
“Shopper expectations of price, quality, choice, convenience, speed, personalisation, health, information and empowerment are changing fast, and the online channel is well placed to deliver against these.”
This story originally appeared on sister-site Inside FMCG.
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