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Grocery market set to boom in Asia says IGD forecast

The grocery market is Asia will generate retail sales of US$4264bn by 2023 – almost as much as the European and North American markets combined – according to market forecasts from IGD Asia.

Asia, the largest regional grocery market in the world, is expected to see an Annual Compound Growth Rate (CAGR) of 6 per cent between 2018 and 2023, to represent a 37 per cent share of total grocery spend. China, India and Indonesia will be the biggest contributors to the region’s sales growth, says the IGD.

“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,” says IGD head of Asia-Pacific Nick Miles.

Despite a slowing of growth in China, the country is still expected to achieve a CAGR of 6 per cent, with online retailers having an increasing influence on the market. “Retailers’ geographic focus is shifting as first-tier cities become saturated and as such, they are looking to establish a presence in lower tier cities. Also, new manned and unmanned store concepts are likely to emerge and change the face of physical retail,” says Miles.

India is predicted to have the most rapid growth over the period, with a CAGR of 11 per cent. “In India, traditional retail continues to make up more than 95% of the market. The traditional 12 million Kirana stores will remain an integral part of the retail landscape, but modern retail chains will expand with a focus on establishing themselves in major cities and urban centres. Online will be one of the most significant modern trade channels, with new retailer partnerships improving supply chain and customer reach,” says Miles.

A declining population in Japan will see a CAGR of just 1 per cent, but Indonesia is expected to see growth of 8 per cent, while South Korea will achieve 5 per cent. “The importance of convenience in South Korea is set to rapidly increase as retailers continue to open lots of new stores and invest in existing operations. South Korea has a high-tech and digitally engaged society and the world’s highest market share for online grocery, meaning retailers will continue to invest in operations to stay ahead,” adds Miles.

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