Online Grocery Sales Soaring in China

By Sam Gopal | 07 Jul 2015

The Chinese online grocery market is set to be worth almost US$180 billion by 2020, nearly five times its current value of US$41 billion, according to a report.

IGD’s Top 10 Online Grocery Markets report indicates online grocery sales in China are soaring as shopper habits gravitate towards the channel, which is maturing at a much faster rate than in other markets, with mobile a key driver of the growth.

Most online sales are via digital marketplaces such as Tmall, owned by Alibaba, and The scale of these pureplay sites means they can offer an increasingly broad product selection.

Busy Chinese consumers are using China’s online marketplaces more to seek out imported goods including food, which is seen as an affordable luxury, and they are prepared to pay premium prices for quality products. As more shoppers come online and China’s population increases, growth is expected to continue, with the sector predicted to be worth almost US$180 billion by 2020.

At an Austrade China e-commerce roadshow hosted by the Australian Trade Commission in Sydney last week, the staggering scope of China’s e-commerce market, with its 320 million users, was revealed. E-commerce has grown into such a dominating sales platform that it now accounts for 10.7 percent of China’s entire retail trade, or about US$500 billion in annual sales.

As such, there is a huge opportunity for Australian businesses to capture the online shopping frenzy gripping China, forecast to top more than US$1 trillion in sales by 2019.

Meanwhile, the world’s second-largest online market for grocery shopping – the UK – continues to see strong growth and innovation. The click-and-collect model is giving retailers new ways to drive loyalty and reach potential customers on-the-go at remote locations. Last week, supermarket chain Asda opened its first fully automated 24-hour online grocery collection point.

Marks & Spencer will start rolling out free in-store collection at more than 100 of its Simply Food outlets in motorway service stations, railways, hospitals and airports this week, making it even easier for customers to shop online.


ASDA’s click-and-collect station at one of its UK sites.

In the UK, 27 percent of shoppers now shop online monthly, with 11 percent citing it as their main way to shop. Loyalty schemes such as delivery passes are helping to drive frequency and overall multichannel spend.

US online grocery shoppers are also upping the amount of grocery shopping they complete online, according to a new survey of 1,100 US online grocery shoppers, commissioned by online organic grocer Door to Door Organics. From it’s findings, 54 percent of online shoppers increased virtual grocery shopping by an average of 29 percent over the last year and say that around 19 percent of their total weekly grocery shopping is done online.

In leading markets, retailers are likely to see the majority of growth occurring online over the next five years, so a focus on this fast-moving channel is essential. Leveraging opportunities such as remote click-and-collect, mobile and wearable technology, will be key for grocery retailers looking to take advantage of this growth.

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