VF Franchise Consulting

Online grocery shopping taking off in Asia?

Feb 12, 2016


Asian consumers are embracing technologies that enable them to buy groceries online and with one click rather than having to walk to bricks and mortar stores to get what they need.

This was among the findings of HappyFresh’s proprietary survey of shoppers across five countries.

Among the findings of the survey is that about 75 percent of online grocery shoppers are between 25 and 44 years old, and the majority are women. They place their orders weekly, and fresh produce accounts for 50 percent of every order.

Not surprisingly, mothers  outnumber all other customers buying groceries online. The top five most ordered items are milk, eggs, onions, bananas and, naturally, baby diapers.  The second biggest group is young professionals and expatriates, whose top buys are tomatoes, spaghetti, coke and chicken breast.

Interestingly, online purchase of groceries peaks at about 5 p.m. on weekdays and 10 a.m. during the weekends and on Monday.

Happy Fresh said this means customers enjoy shopping at the end of working hours or like to get their shopping done during the weekend or early on Monday so they don’t need to worry about groceries for the rest of the week.

“We are seeing an “uberization” of the retail industry in Asia. The outlook has never been more promising. Opportunities abound in this region with its sophisticated food-loving consumers, growing wealth and rapid urbanization. The continued increase in mobile adoption and broadband penetration has helped boost our online grocery sales,” said Markus Bihler, CEO of HappyFresh.

Founded only in 2012, Happy Fresh is headquartered in Jakarta but operates across the region. Last year, the company completed a $12-million Series A funding led by Vertex Venture (Vertex), the venture arm of Temasek Holdings, and Sinar Mas Digital Ventures (SMDV), the venture arm of Sinar Mas Group of Indonesia.

Riding on this new wave in the retail landscape, the online grocery platform forecasts a double-digit growth for the grocery markets in Asia and to be worth SGD$19 billion by 2020.

It sees large supermarkets and hypermarkets as important players in the grocery retail landscape and they will continue to do well and dominate in this region. Many, however, are integrating online delivery service into their business model to make it even easier for tech-savvy, time-crunched consumers.

Biller said  HappyFresh partners with supermarket retailers – particularly the SMEs (Small and medium-sized enterprises) who do not have the capacity or ability to invest in technology – to go digital and reach out to a new set of customers.

Its partners include Ranch Market (Indonesia), LOTTE Mart (Indonesia) and Village Grocer, Sam’s Groceria and de Market (Malaysia), Big C, Gourmet Market and Tang Hua Seng (Thailand), Lafé Market and Simple Mart (Taiwan).

“Currently, two out of five online shoppers want to receive real-time offers via their smartphones while they shop. Thus, we foresee a double-digit growth ahead for the online grocery business,” Bihler said.

More consumers are also purchasing groceries via digital platforms such as mobile apps.

HappyFresh sees the increased popularity of online grocery shopping in Asia being fueled by two factors – traffic congestion and long working hours in most Asian Cities.

Three Southeast Asian cities (Jakarta, Bangkok, and Surabaya) are in the Top 10 cities with the worst traffic congestion globally, according to a traffic congestion survey conducted by Castrol and Tom Tom.

Asian countries also tend to have the longest working hours; they have the highest proportion of people who spend more than 48 hours a week at work. This number is expected to rise as Asia becomes even more affluent.

“Customers are also becoming very selective when it comes to quality foods. A Nielsen study shows that today’s shoppers are seeking fresh, natural and minimally processed foods with ingredients that help fight disease and promote good health,” Bihler said.

“This presents a tremendous opportunity for niche consumer segments, especially in the healthy eating space, and other categories that may be more difficult to find on in-store shelves. As a result, a number of specialty retailers have emerged in the health and wellness space, from national online grocery delivery services with extensive fresh sections to local produce delivery services,” he added.

Source: Retail News Asia

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