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Tag: Grocery

  • Vietnamese prefer fresh food by far to processed items

    Vietnamese prefer fresh food by far to processed items

    Vietnamese citizens spend three times more on fresh food than fast-consumer moving goods (FMCG), a new survey says. A family in urban Vietnam spends about VND1.1 million ($47.12) on fresh food a month, according to the recent survey by market research firm Kantar Worldpanel Vietnam.

    The survey polled over 2,000 households in Hanoi, the central city of Da Nang, Ho Chi Minh City and southern Can Tho City, and over 1,000 households in various rural areas across Vietnam.

    Fruits top the spending category in fresh food, accounting for 19 percent of the total, while vegetables come second at 11 percent. The rest goes to meat, seafood and rice.

    The traditional market remains the favorite shopping outlet for Vietnamese people, accounting for 85 percent of total spending on fresh food.

    Vietnamese people spend VND930,000 ($39.81) per week on fresh food at traditional markets, mostly on meat and seafood.

    Although locals spend only VND220,000 ($9.42) per week on fresh food at supermarkets, the figure shows a 28 percent growth over last year. Most of the supermarket spending is on fruits and processed food.

    Fresh food and FMCG make up the majority of Vietnamese people’s spending at 26.8 percent last year in the cities and 25.9 percent in rural areas.

    With rising incomes, Vietnamese people, especially in the cities, have been spending more on education and health, the report finds.

    The share of spending on education by urban families increased from 10.8 percent in 2012 to 12.9 percent last year, while spending on health grew from 3.5 percent to 3.9 percent in the same period.

    The report also finds that Vietnamese consumers accord top spending priority to food safety, health and environmental issues/disease.

    The majority of survey respondents, 96 percent, are confident that their spending capability will be stable or increase in upcoming months, and 86 percent expect the Vietnamese economy to be stable or grow stronger in the near future.

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  • LOTS to cheer for the Cash & Carry business in India

    LOTS to cheer for the Cash & Carry business in India

    LOTS Wholesale Solutions recently unveiled its second Cash & Carry wholesale distribution centre in India at Akshardham in East Delhi. The launch of LOTS’ second store follows closely on the heels of its first store three months ago. Inaugurated by Amitabh Kant, CEO, NITI Aayog, this is second of the fifteen distribution centres that the firm is aiming to open in India over the next three years.

    The newly launched store will cater to over 45,000 registered business customers, which include hotels, restaurants, and caterers (HoReCa), kirana stores, corporates, MSMEs and institutions such as government agencies, educational institutes, and hospitals.

    Spread over an area of more than 53,000 sq. ft., the newly opened store has all the facilities including automatic system orders forre-stocking, predicting the demand as per customer’s behaviour, and designated goods receiving and dispatching, live bakery, among many more. Other notable features are transparent pricing, round-the-year promotions, consistent product availability, customized last mile delivery and credit facilities, all of which are tailored to satisfy the needs of its registered members.

    “We had promised to open two wholesale distribution centres in India in 2018. Today, that promise has been fulfilled. From our first store, we have exceeded the expectations we had set for ourselves. We have been getting very good response and we are getting 600-1500 walk-in customers daily. We decided to open our second store in Akshardham in view of the unfulfilled potential of the area in terms of wholesale buying options. The facility is all set to cater to the requirements of our members in east Delhi and nearby catchment areas. Through this store, the business customers of LOTS Wholesale Solutions will have a wide range of more than 5,000 food and no-food products to select from. Besides, they will also benefit from customized delivery solutions, competitive pricing and personalized service through our business development associates,” Tanit Chearavanont, Managing Director, LOTS Wholesale Solutions, said commenting on the launch of the new store. With its expanding footprint in Delhi-NCR, LOTS Wholesale Solutions will generate 5,000 direct and indirect jobs over the next five years.

    The launch ceremony was presided over by the chief guest Amitabh Kant, CEO, NITI Aayog. Also present at the launch ceremony was Chutintorn Gongsakdi, Thailand’s Ambassador to India and LOTS’ global and Indian leadership team. “I congratulate LOTS Wholesale Solutions on opening its second store in Delhi-NCR. The Retail sector in India is poised for higher growth as we are growing at 8.2 percent. We have jumped 65 spot and moved up substantially in the ease of doing business. India is the only country to have repealed 1,300 regulatory laws as part of our efforts towards creating a better business environment. Indian FDI has grown 62 percent whereas globally the numbers have shrunk by 16 percent.

    This is a unique story for Indian retail and the government is pushing for greater financial inclusion and working closely with other stakeholders. Such enabling regulatory norms and liberalised FDI policy should make it easier for global companies like LOTS to invest in India and on mutually benefiting terms. We will act as a facilitator and assure them of all the support they need to excel and deliver on the demands and expectations of their customers,” said Kant.

    In recent years, India has emerged as one of the top destinations for FDI. The inflow of FDI into India has gone up significantly with receipts flowing in from across the world, which has given India access to the latest technology, best practices, and global innovations. The arrival of multinational companies like CP Wholesale Solutions in India, which has chosen a 100 percent FDI route to establish its operations in India, further vindicates the popularity of Brand India in the world. With India’s retail sector projected to grow to USD 1.3 trillion by 2020, the country is the land of opportunities for potential investors and companies looking to start operations here.

    There has been an overall growth of the Indian economy, which has increased the purchasing power of the people in rural areas opening development opportunities for the companies to expand their presence. This offers a huge potential for Cash & Carry players to target B2B customers – like kirana stores and catering to the rural audience. Also, the implementation of GST has created a favourable environment for companies like LOTS that aim to establish and expand operations across India. It rubs off positively on supply chain efficiency, uniform assortment of goods and in supporting the end consumers. Cash & Carry, also known as wholesale trade, is fast emerging in India, where Lots Wholesale competes with players such as Walmart, Metro Cash and Carry and Reliance Cash and Carry, a unit of Reliance Industries Ltd. According to Ambassador Chutintorn Gongsakdi, after the arrival of LOTS in India, business interest in the country has picked up substantially and many more companies from

    Thailand have begun making enquiries about starting operations in India. “As the Thai Ambassador to India, I have set an ongoing goal for India and Thailand to strengthen our economic relations. One target I had was to have at least two new businesses to come and start business in India during my term in office,” said the Ambassador. He remarked in a lighter vein that his task in India has already been accomplished within one and half years of taking up office. “With the registration ofCP Group’s LOTS Wholesale Solutions Pvt. Ltd. and SCG International Pvt. Ltd., I have already succeeded in meeting my target. I can go home but I have reset my target to bring in two new Thai companies per year.”

    Expressing his satisfaction and pleasure at India’s participation in Thailand’s eastern economic corridor, he observed: “Speaking on this occasion, I already know that two new businesses are in the process of registering their business in India. So things are very vibrant. I have witnessed all the hard work done by Tanit and his team with respect to LOTS’ first store. I would like to sincerely congratulate the LOTS team on the opening of the second store. To witness a Thai MNC such as CPGroup, known for great corporate governance and values, grow their business in India gives us great satisfaction and pride. India is a dynamic country with a great future and it is a moment of pride for the Royal Thailand government and myself that Thai companies are keen to play a contributory role in India’s economy.”

    Pointing out that the opening of the LOTS’ second store reflects the ongoing rise of Thai businesses in India and is proof of T ai investment successfully flowing into India, Ambassador Chutintorn Gongsakdi said: “LOTS and CP Group’s success will, in turn, have a halo effect on other companies in the CP Group and other Thai businesses wanting to enter India. As ambassador, I am pleased to see the full potential of Indo-Thai economic relations being developed through the engagement of CP Group and other Th ai MNCs and SMEs and also vice versa from the Indian side.We have now around 28 Thai companies in India and the 28 will soon be thirty and more. The trend is good and The Royal Thai embassy has been receiving many expressions of interest in doing business with Thailand from the Indian side as well. I will use my office as a business matching venue to put this act together. Thanks to the eff orts of Amitabh Kant, Niti Ayog, and others in team India, the government in India has been very successful in reforming the economy and making it friendly to investors. Th is is the right time for Th ai businesses to secure their place in India’s future. And this message is not only for Th ais but other ASEAN and other nationalities as well. It’s not too late to be in India and startnow but in another five years it will almost be too late. Thailand is ranked 26 in the ease of doing business and we also off er a very friendly setting for foreign investors wishing to set up operations in our country.”

    The Indian government, on its part, is actively favouring open-door policies in investment and trade. The government is pushing for financial inclusion and working closely with ministries like Commerce, DIPP and Food Processing to bring relief to farmers by doubling their income through better yield. “It is our vision to make India an ideal place for large format business groups to set up shop and contribute to the growing demands of our growing nation. I am impressed that LOTS with its values of “local love” and principles of 3Cs – country,community and company – is not just about profit making but also about focusing on contributing to the society in equal measure. My compliments to LOTS Wholesale Solutions for opening two wholesale stores within a span of three months,” Kant said.

    In India, LOTS is committed to invest over Rs 1,000 crore in the first five years and its plan of opening 15 wholesale distribution centres across northern India has already started taking shape. Within a span of one year of signing the Memorandum of Understanding (MoU) with the Ministry of Food Processing Industries, the company – CP Wholesale India Private Limited – was incorporated, LOTS brand was launched and two stores have started operations already. It plans to open a third one in Noida by the end of this financial year. Because of the real estate challenges in the country, the company has decided to open 25,000-50,000 sq. ft. stores inside the cities instead of outskirts. “If we build centres out of the city, it is very difficult for the people to travel. Th at is the reason why we continue to focus on building stores where the catchment is,” said Tanit.

    The company, which invests on average Rs. 60-70 crore in one centre, is also looking at opening stores in Lucknow, Kanpur, Varanasi, Jalandhar, and Kolkata. For the next 2-3 years, the company will continue to add more stores in north India as a part of its expansion plans and intends to have a national footprint in 10 years time. Besides, the company also plans to adopt the omni-channel system for integrating online sales channel with its brick and mortar stores and is also exploring the idea of having dark stores/fulfilment centre in India.

    “With regulatory changes like GST, demonetization, RERA and the Make in India policy bringing about a higher organization on the Indian retail scene, there is no time like the present for retailers from across the world to venture into the country and invest. Our parent company Siam Makro has defi nitive expansion plans in the ASEAN region and owing to a positive regulatory environment, India is the first on our list. We see a lot of potential and the right type of investing and retailing environment in the country, which is why we were ready to take the lead here,” said Sameer Singh, Director – Operations, Business Development and Expansion, LOTS Wholesale Solutions.

    He added that LOTS follows a cluster approach. The brand sets up stores basis the supplier/ customer base so that it can provide them with a hassle-free experience and build a robust supply chain and make the delivery process faster. “Our parent company Siam Makro has evolved into several separate store formats and we are bringing all these formats and this knowledge to India, ready to explore both large or small sizes and even multilevel sizes. We can look at different sizes, which could help us at different levels. It gives us that excitement to be part of the catchment itself, otherwise we might be stuck on a certain format,” explains Singh.

    This catchment-specific approach is extended to the daily needs and grocery sections of the product range of LOTS as well. All efforts are made to source fresh produce from local farming community, which helps farmers earn better while reducing wastage during transportation and storage.

    According to Singh, LOTS offers solutions to member companies, which help them undertake a path of sustainable growth. Our product selection is based on detailed research that is specific to the region as well as the community. A critical element is to provide support to the home-grown brands – an essential component of our region-specific business strategy. Therefore, apart from engaging with international brands, we are working very closely with Indian brands and local farmers.”

    Taking pride in working with the local community and giving back to society, LOTS has joined hands with farmers in Bhatinda to help them adopt progressive farming methodology. In addition to that, the company is committed to sourcing fresh produce from the local farming communities, share know-how and packaging and storage so that farmers can reduce wastage during transportation and storage and increase their income. The company hopes that its efforts will help to develop the agricultural sector in India.

    At the same time, LOTS is focused on customers’ needs and satisfaction. The company brings specially curated assortments, categorised into food and beverages, kitchenware, household appliances, home decor, furniture, bedding, textiles, stationery and office supplies, electronic products and others; making LOTS Wholesale Solutions a complete one-stop shop. Th e company also offers a varied set of benefits to its members, including a wide range of product selection at its stores, based on detailed research specifically catered to the catchment area and market demand. Th e company, which currently has a customer base of around one lakh members,will also offer its support to home-grown brands and local suppliers and is looking to turn profitable in the next five years.

    “We place our customers at the core of our business and aim to provide a hassle-free shopping experience, making LOTS Wholesale Solutions a one stop shop for all their business needs. We aim at sourcing our products from not only top international brands but also Indian brands as well. Additionally, we believe in supporting the local community so that they flourish without support,” emphasised Tanit Chearavanont.

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  • Hyundai Department Store offers higher price rice

    Hyundai Department Store offers higher price rice

    Hyundai Department Store is hoping to cash in on Korea’s growing preference for premium rice with Hyundai Rice House, its new chain rice stores. Hyundai Rice House, which opened inside four existing Hyundai Department Stores on Wednesday, offers around 20 different types of high-quality rice unfamiliar to the average rice eater, such as Youngho Jinmi and Golden Queen No. 3.

    Despite changing tastes in Korea that are seeing a growing preference for Western food and an overall decrease in demand for rice, premium rice is growing in popularity.

    Hyundai Department Store reported a 3.1 percent decrease in its rice sales growth figures through November this year compared to the previous year, but sales of premium rice such as Koshihikari and Hitomebore have increased by 15.7 percent over the same period.

    Hyundai is pulling out all the stops to satisfy Korea’s budding rice connoisseurs, and the new stores will also sell bags of rice that contain different varieties mixed together in combinations chosen by a “rice sommelier.”

    The expert, accredited by the Corporation of Rice-Cooking of Japan, will also visit stores once every month to conduct “rice taste consulting” for customers to help them find rice that best suits their tastes and nutritional needs.

    The department store is also going to stock more small bags of rice to address the increase in one or two-person households in the country.

    Hyundai will continue to increase its rice lineup next year by introducing other Korean regional specialties produced only in small quantities.

    “[We] planned Hyundai Rice House to target customers who want to eat well even for one meal as the convenience food market continues to expand with the increase of one and two-person households,” said a Hyundai Department Store official.

    Customers will have to shell out more cash for the pricey rice as the average cost is 15 to 25 percent higher than the existing rice sold at the department store.

    The specialty store is located at Hyundai Department Store’s branches in Mok-dong, western Seoul; Pangyo, Gyeonggi; Ulsan and Busan.

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  • Global grocery markets growth fuelled by Asia, says IGD

    Global grocery markets growth fuelled by Asia, says IGD

    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.”

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  • E-mart US buys supermarket operator

    E-mart US buys supermarket operator

    South Korean discount retail chain E-mart is acquiring US food retailer Good Food Holdings for US$270 million. A subsidiary of retail conglomerate Shinsegae, the E-mart US acquisition intends to stabilise and expand its operations in North America. It is the company’s first acquisition of an overseas firm.

    Good Food operates 24 stores across the American West under three brands: Bristol Farms, Lazy Acres and Metropolitan Market. Its original executive board will be retained by E-mart.

    Good Food Holdings employs 3100 people and brings in average sales of KRW 670 billion ($596.75 million) per annum. E-mart plans to open a premium store-restaurant in Los Angeles next year called PK Market.

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  • Malaysia projected 4.9% retail sales growth for 2018

    Malaysia projected 4.9% retail sales growth for 2018

    The Malaysia Retail Chain Association (MRCA), which expects retail sales growth to come in at 4.9% for 2018 in line with the country’s gross domestic product growth, has pointed out that some of its members face difficulties in retailing online amid the push for e-commerce.

    MRCA, in releasing its first quarterly retail sales survey for the third quarter (Q3) today, highlighted that online sales make up only 3.9% of its retail revenue.

    The sample of respondents for the survey include 10% of MRCA’s members, representing 59 brands and 2,266 stores across a variety of trade categories, including food & beverage (F&B), fashion, health & beauty, supermarket & department stores, entertainment, optical, education, home improvement and more.

    MRCA president Datuk Seri Garry Chua said the association constantly reminds members to bring their businesses online and be part of the digital ecosystem, adding that MRCA also has digital membership for players like Lazada, Lelong and 11street, which are all its members.

    “We can also work closely with them (digital players) to reinforce and increase the market share for online. We’re confident the (industry) sales from online retail is going to be double-digit growth every year as more brick and mortar retailers go online, as with many start-ups,” Chua said.

    MRCA vice-president Datuk Liew Bin said although all members have an online presence, most of its members rely on the brick and mortar model and “survive happily on brick and mortar”, whereby online sales is regarded as a bonus to them.

    “With so many years in brick and mortar, it’s difficult for our members to turn to online. This is one of the challenges that our retailers face because (the) online (wave) is coming on strongly. This should be an alert to our members, as 3.9% is still a small figure,” Liew said, adding that MRCA expects online sales to grow 5% next year.

    Individually, he said some retailers have seen a 20% growth in their online retail sales.

    MRCA projected retail sales growth to grow 6.1% year-on-year in Q4 this year as year-end school holidays and the festive season are expected to bolster consumer spending; while an increase in the number of outlets is also expected to boost sales growth.

    It said retail sales grew 5.7% year-on-year in Q3 with the tax holiday between June and August that had encouraged consumers to spend.

    In Q2, retail sales grew at a slower rate of 2.1% year-on-year, affected mainly by the general election in May, where consumers held back on spending due to economic uncertainty.

    Retail sales grew 5.7% year-on-year in Q1 due to Chinese New Year sales and promotions.

    F&B, health & beauty and other retailers reported encouraging growth rate of 5.4%, 3.1% and 21.3% year-on-year respectively. However, fashion retailers suffered a negative growth in Q2 and Q3 at -2.2% and -2.8% year-on-year respectively.

  • India’s Spencer’s opens 9 stores in 90 days

    India’s Spencer’s opens 9 stores in 90 days

    Spencer’s Retail, the multi-format retailer from RP-Sanjiv Goenka Group is on an expansion spree. It is presently focussing to expand the store count in existing clusters in east, south and north of India.nIn this effort, Spencer’s essentially opened one store in every 10 days and thereby augmented the retail network of the chain recently by adding 9 new stores in 90 days. With this expansion, the store count of Spencer’s has now reached 146 across 37 cities.

    The strength of Spencer’s lies in its retail network which is constantly growing. It is an endeavour of Spencer’s to become more accessible to the customers and after receiving positive feedback from the clusters it operates in, the chain is poised to explore new territories.

    In this phase, Spencer’s launched stores in existing cities and its adjoining areas like Rajarhat in Kolkata, Maheshtala (South 24 Parganas), City Mall (Gomti Nagar) in Lucknow, Raheja Mall (Sector 47) in Gurugram, Sector 48 in Noida, Madeenaguda in Hyderabad, and at Howrah’s Aurobindo Mall.

    The size of these stores varies between 2,000 sq. ft. to 15,000 sq. ft.. The stores offer a wide range of assortment from different categories including Fresh Fruits & Vegetables, Fish & Meat, Staples and Groceries, FMCG, Dairy and Frozen products, Organic Food items, Dry Fruits, Apparels, Electronics and Electricals and Home Essentials. The product range in each of the new store has been meticulously planned to suit the tastes and preferences of the local neighbourhood.

    According to the Spencer’s spokesperson, “To consolidate the business, Spencer’s is dedicatedly selecting 360 degree catchments where the customers are looking for aspirational products in an affordable range. The expansion of Spencer’s currently is focussed at metros as well as in Tier I and II cities. In this FY we are further concentrating at spreading our network in the profitable zones like West Bengal, Delhi NCR, East UP and down south in Hyderabad and Chennai. In terms of product range, with more than 25,000 SKU’s (Stock Keeping Units), Spencer’s is constantly evolving in terms of its offing at each store. It is not only limited to food category but Spencer’s has extended a similar experience in the non-food and general merchandise space.”

    Spencer’s has been redefining the Indian retail landscape since 1863 and with the brand proposition ‘Makes Fine Living Affordable’, it continues to inculcate the same kind of trust and patronage among its millions of consumers across India.

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  • 7Fresh to open store in Shanghai

    7Fresh to open store in Shanghai

    E-commerce giant JD’s offline retail store 7Fresh is set to launch at Shangbin Plaza in Shanghai’s Hongkou District. The move is regarded as a step towards expansion nationwide beyond the firm’s home base in Beijing, as well as an attempt to follow recent trends to diversify from online-only business models. The high spending power of Shanghai residents was key in determining the store’s location.

    JD expects to be operating 1000 outlets with three to five years, using insights learnt from trading online to tailor product ranges popular locally. It will be taking on rival Alibaba’s Hema Market, which has already grown to more than 100 outlets.

    JD’s senior VP Wang Xiaosong said: “JD’s online fresh food business provides an advantage in terms of merchandise selection when we’re expanding into offline retail.”

    Shangbin Plaza is due to open early next year.

  • Walmart sales goes back on track

    Walmart sales goes back on track

    US retailer Walmart has reported a 4.7 per cent increase in operating income in the third quarter to US$4.98 billion, and a 3.4 per cent increase in year-on-year comparable sales. Walmart sales for the period reached US$124.9 billion, an increase of 1.4 per cent.

    “We have momentum in the business as we execute our plan and benefit from a favourable economic environment in the US,” Walmart president and CEO Doug McMillon said in a statement.

    “We’re accelerating innovation and using technology to shape the future of retail [and] making shopping at Walmart faster and easier.”

    The retailer saw a 43 per cent increase in online sales in the quarter, largely thanks to its investment in its e-commerce business, as well as key acquisitions, according to GlobalData Retail’s MD Neil Saunders.

    “Making online work for customers has been a priority for Walmart, but the company is also conscious that online needs to deliver in terms of profitability,” Saunders said.

    “On this front, we are impressed with the experimentation on automation and the testing of various last mile solutions for grocery. We believe that Walmart has the skill, financial muscle, and the physical infrastructure to drive profitable online growth in a way that many other retailers, especially grocery players, will struggle to achieve.”

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  • Chinese grocery market set for solid growth, says IGD

    Chinese grocery market set for solid growth, says IGD

    A report released by the international grocery research organisation IGD has forecast growth of 32.6 per cent in the Chinese grocery market by 2022, preserving its status as the largest grocery market in Asia. Grocery retail sales in China are set to rise to CNY 11.4 trillion (US$1.637 billion), more than India, Japan and Indonesia combined.

    The market is expected to see a CAGR of 5.8 per cent over the next five years, on par with Thailand but slower than markets such as India, Vietnam and Bangladesh, where the economy is growing faster.

    Globally, China will remain the second largest grocery market in the world by 2022, behind the US in terms of value.

    Shirley Zhu, programme director for IGD’s Asia-Pacific research, said China continues to be an exciting market to watch with its significant size and rapid growth. “Retailers with nationwide networks such as Sun Art, Yonghui, Walmart, CRV and Carrefour will reap rewards from ongoing expansion, partnerships with e-commerce players, improved efficiency and investment in small formats.

    “Similarly, e-commerce giants such as Alibaba and JD.com will see significant growth from both online and offline channels and become the second and third largest grocery retailers in China, respectively. Regional players such as NGS, Wumart and Bailian will continue on their journey of transformation and consolidation and focus on profitability.”

    Market share for hypermarkets and supermarkets will remain steady, close to 40 per cent of the market up until 2022. However, the supermarket channel will overtake hypermarkets as the largest sales channel with a market share of 20.7 per cent, says IGD.

    “Convenience will be the fastest-growing physical store channel”, said Zhu. “This will be driven by Alibaba and JD transforming traditional mom-and-pop stores, retailers opening smaller format stores and both local and overseas players expanding their networks through partnerships. Online and offline integration will drive online growth. As the fastest growing channel, we forecast online to contribute up to 11.1 per cent of sales in 2022.”

    Less than half of the grocery sales in China currently go through traditional trade. As the market continues to mature, traditional trade will keep losing share to modern trade, which currently accounts for about 57 per cent of total grocery retail sales and is predicted to grow to 66 per cent by 2022.

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  • Big C to open in Malaysia

    Big C to open in Malaysia

    Thai Hypermarket Big C appears to be preparing to enter Malaysia. According to several websites, Fraser and Neave, a subsidiary of billionaire Charoen Sirivadhanabhakdi’s TCC Group, is in the process of completing local regulatory requirements through Ministry of International Trade and Industry to prepare for the launch of Big C Malaysia.

    The target opening date has not been confirmed.

    However, the first Big C Malaysia Supercentre is expected to be located in Kedah in northwest Malaysia, near the Thai border.

    Big C currently operates in Thailand, Vietnam and Laos.

    Many Malaysians reportedly cross the border into Thailand to shop at the Big C hypermarket in Hat Yai, in Thailand’s south, giving the company confidence its offer would be popular among residents of its neighbouring country.

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  • Asia to dominate global grocery market by 2022

    Asia to dominate global grocery market by 2022

    The region is expected to enjoy a CAGR of 6.6%.

    Asia is expected to dominate the global grocery retail market as it is projected to add $1.2t in sales which is more than Africa, Europe and Latin America combined, according to Institute of Grocery Distribution (IGD).

    IGD forecasts that Asia will enjoy a compound annual growth rate (CAGR) of 6.6%.

    Levels of consumer spending from Asia account for nearly half of additional sales generated until 2022 as the region’s grocery retail market is significantly boosted by its continuously rising population.

    Six countries from Asia secured a spot in the top 20 largest grocery markets by 2022, led by China at second place with a projected value of $1.67b.

    India follows at third place with an expected $812b value by 2022.

    Japan is at fifth place with a projected value of $455b; Indonesia notched seventh with $313b; Philippines at $153b and South Korea at $141b.

    “With China, India and Japan all in the top five, Asia’s grocery market continues to be in rude health thanks to growing populations and shoppers with more disposable income. Innovations in this market also continue apace, especially in China, where retailers are experimenting to drive the online and convenience channels,” said John Wright of IGD.

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  • Philippines set to be Asia’s fifth largest retail grocery market

    Philippines set to be Asia’s fifth largest retail grocery market

    The Philippines will soon be the Asia’s fifth largest retail grocery market, according to data released today.

    Speaking on the first day of NRCE, the 24th National Retail Conference in the Philippines, today, IGD Asia-Pacific program director Shirley Zhu said the market will grow by an average of 9.3 per cent year-on-year between 2016 and 2021.

    Grocery retail sales in the Philippines are set to amount to PHP7.08 trillion (US$149.99 billion) by 2021 from PHP4.53 trillion (US$95.98 billion) in 2016, the international grocery research organisation’s data concludes.

    Zhu says the growth will be driven by a growing population, strong domestic consumption and a buoyant economy, lifting it from sixth to fifth, behind China, India, Japan and Indonesia.

    “The Philippines is an exciting market to watch. Modern trade currently accounts for about 20 per cent of total grocery retail sales and is growing rapidly,” said Zhu.

    “We expect to see fast growth in both the number of outlets and sales for modern grocery retailers.”

    Domestic multi-format retailers dominate modern trade and have shown robust growth over the last five years, with SM Retail, Puregold and Robinsons the dominant grocery retailers in the country. SM Retail, for example, is focusing on expanding its mid-sized and small-format stores. In 2016, the retailer opened 144 stores, only one of which was a hypermarket, while 111 opened under the Alfamart minimarket fascia, through a joint venture with Indonesia-based PT Sumber Alfaria Trijaya. SM Retail continues to expand beyond Metro Manila; in 2016, 80 per cent of its store openings were outside this area. Meanwhile, Puregold and Robinsons share a similar ambition to expand further beyond the Luzon area with their multi-channel strategies. 7-Eleven, the fastest-growing retailer in the Philippines according to IGD data, is also expanding its stores into smaller towns across the nation.

    “Driven by more disposable income and increasingly urbanised lifestyles, Filipino shoppers are demanding more convenience in their grocery shopping. As a result, convenience and online are the hottest channels in the market,” said Zhu.

    “The number of c-stores in the country is set to increase as domestic retailers continue to drive this part of the market, bringing in more convenience banners to the country. One of the reasons that demand for convenience stores is so high is because of the rising number of business process outsourcing, or call centres, in the Philippines. These are centred mainly in urban areas, operate 24 hours a day and tend to employ young people with disposable income, who want to shop for their groceries as conveniently as possible.”

    Zhu said online grocery shopping in the Philippines is still in its infancy, but many bricks and mortar retailers have already been experimenting with their own ecommerce solutions.

    “Lazada, the leading ecommerce platform in Southeast Asia, has been operating in the Philippines since 2012 and now has 6 million users in the country. The ecommerce company reportedly plans to go into grocery in the next two years.”

    Looking into the future, Zhu predicts there will be fewer ‘mom and pop’ stores – locally known as sari-sari stores – and there is no doubt that the convenience and online channels will be on a fast growth trajectory over the next few years.

    “There is a wealth of opportunity for retailers and suppliers looking to grab a slice of the action in this rapidly evolving market.”

  • Korea ranks number 1 in online grocery shopping

    Korea ranks number 1 in online grocery shopping

    South Korea ranked No. 1 in terms of e-commence for grocery shopping, far outpacing other major developed countries, an industry report showed.

    According to the report by industry tracker, Kantar Worldpanel, the percentage of fast-moving consumer goods shopping via online and mobile channels out of all purchases in South Korea between June 2015 and June 2016 came to 16.6 percent.

    FMCG refers to goods such as soft drinks, toiletries, over-the-counter drugs, processed foods and many other consumables.
    Japan came in second with 7.2 percent, followed by the United Kingdom with 6.9 percent, France with 5.3 percent and Taiwan with 5.2 percent, the report showed.

    For the United States, the share of e-commerce represented just 1.4 percent, Kantar Worldpanel said. However, with initiatives from Amazon and more established grocery retailers, the region is likely to catch up quickly.

    South Korea also ranked the highest in terms of the percentage of households that buy online FMCG products at least once a year.

    Industry watchers attributed the broadened digital shopping experience by South Koreans to an aggressive expansion of online-based fresh food delivery services by key e-commerce companies and related startups.

    The diversification of fresh food supplies and shortened delivery periods due to heated market competition has led to the overall increase of the transactions and improvement of online shopping services for consumers.

    The growing number of single-person households is another factor that has fueled the demand for online grocery shopping here, observers added.

    Along with many double-income families that have little time to shop at a supermarket, those who live and eat alone have shown a tendency to spend generously if they can have groceries delivered with a simple click.

    One-person households in Korea account for some 35 percent of the total population as of September 2016. The trend has prompted local retailers and e-commerce companies to scramble to launch fresh food delivery services.

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  • China’s tech giants in race to transform grocery shopping

    China’s tech giants in race to transform grocery shopping

    As Amazon.com looks to swallow United States grocery chain Whole Foods, China’s tech giants are already digesting hefty bricks-and-mortar deals, taking the lead in the battle to transform supermarket shopping with big data and better supply chains.

    China’s Alibaba Group Holding and JD.com have invested heavily in offline retail – bricks-and-mortar stores – in recent years to complement their online offerings.

    With their ready-made payment and social media platforms to lure shoppers, Alibaba and JD.com have helped China become the world’s largest online grocery market, far ahead of the US.

    This early lead, cemented by densely populated urban areas and cheap labour, could be key as retailers and tech firms race to boost margins on low-cost consumer goods by reinventing supply chains with big data analytics.

    “China is already the largest online grocery market in terms of value in the world, so it’s really advanced in terms of scale,” said Mr Nick Miles, head of Asia-Pacific for food and grocery industry research body IGD. Sales made online are set to more than double to around 6.6 per cent of China’s broader grocery market by 2020, compared with around 1.4 per cent for US sales by then.

    Both US and Chinese e-commerce firms are grappling with the challenge of increasing their margins on fast-moving consumer goods (FMCG), which include low-margin, high-demand goods with a short shelf-life – a staple of grocery stores.

    Alibaba, which has a burgeoning cloud business that competes directly with Amazon, plans to use its trove of consumer data to provide a suite of connected services back to the brands whose goods it sells. Services will include inventory management, smart manufacturing and logistics, which aim to slash waste and margins across the entire supply chain, according to the company’s “New Retail” strategy.

    Likewise, JD.com uses data from a partnership with China’s hugely popular messaging app WeChat, which has over 930 million users, to build data profiles for a range of brands including baby products, cosmetics and soft drinks.

    Alibaba has invested over US$9.3 billion (S$12.9 billion) in offline retail stores since 2015, including supermarket chain Sanjiang, department store Intime Retail Group and Suning Commerce Group, one of China’s biggest offline retailers. Last month, it took an 18 per cent stake in Lianhua Supermarket Holdings, part of retailer Bailian Group.

    JD.com bought Wal-Mart Stores’ Chinese online platform Yihaodian for about US$1.5 billion in shares last year.

    US firms are now looking to play catch-up as bricks-and-mortar stores are hit by a slowdown and online players battle with tight profit margins and high delivery costs.

    Amazon launched a US$13.7 billion bid for grocery chain Whole Foods Market last week, marking its intention to take on Wal-Mart.

    Wal-Mart, which got a stake in JD.com in the Yihaodian deal, raised its share in the Chinese firm to 12.1 per cent in February, having bought online retailer Jet.com in a US$3 billion deal last year.