Singapore’s online grocery market is set to triple in growth over the next three years, from S$130m (US$91m) to S$0.5bn (US$0.35bn) by 2020, according to brand-new forecasts unveiled by international grocery research organisation IGD
At the end of 2016, IGD valued online grocery to have a 1.2% share of the Singaporean grocery market. Reflecting rapidly changing shopper habits in the region and increased investment in the online channel from retailers and suppliers, IGD is further forecasting online to take a 4% share of Singapore’s grocery market by 2020, with a compound annual growth rate of 39%.
Revealing the figures at the IGD RedMart Trade Briefing, held on 23 February in Singapore, Nick Miles, IGD’s Head of Asia-Pacific, said
: “Singapore is hailing a new era of digital grocery retailing, driven by the entry of RedMart in 2011, Giant and Sheng Siong launching online grocery in 2013 and plenty of smaller start-up businesses also looking to grab a slice of the action.
“Shopper habits are changing rapidly in South East Asia and in a compact city such as Singapore, with its relatively affluent population, big expat community and high penetration of internet and smartphone usage, there are huge opportunities for online grocery to meet these evolving needs. To make the most of this opportunity, retailers and suppliers must work together to ensure they really understand online shoppers and can tailor experiences and products to suit their personal preferences.
“First, retailers are looking to improve the overall online experience, by getting the basics of search functions, favourites, images and information right for shoppers. At the same time, they’ll be aiming to make delivery options as convenient as possible, whether that’s through shorter timespan delivery slots or greater choice of click and collect points throughout the region. Our UK data shows that 80% of shoppers cite convenience as their number-one reason for shopping online, and we would anticipate Singaporean shoppers to have a very similar mindset when heading online for their groceries.
“We also expect online grocery retailers in the region to encourage shopper loyalty through personalised offers and products, plus subscription models and delivery saver passes. On top of that, shoppers in the region are increasingly connected via mobile, so ensuring a seamless shopping experience no matter what device they are using will be critical. Coupled with an increased focus on using innovations such as voice-activated technology, virtual reality and robotics, we predict huge opportunities for those retailers and suppliers who really invest in making the online grocery channel work for them in Singapore.”
Meanwhile, the growing importance of online retailing and e-commerce in Asia was highlighted, late in 2016, at an FIA Lunch Series on the topic: “E-commerce: Is it a disrupter or an enabler for the food industry” where the panellists suggested that due to technological advancement, evolving consumer trends and improved logistics, the growing e-commerce market in Asia faces both unique challenges and new opportunities.
Explaining the reasons for the growth of online grocery across Asia, Ms Shirley Zhu, Programme Director, IGD Services (Singapore), presented four main drivers: rise of the middle class, maturation of millennials, smartphone penetration and improvements in logistical infrastructure.
Dr Deborah Elms, Executive Director, ATC, said that e-commerce is viewed as a disruptor for many governments across Asia, which will pose serious regulatory challenges for brands with an online retail presence.
In order to have success in the online trade environment, Dr Elms added, companies need to set clear objectives and strategies, seek to educate government officials on the benefits of e-commerce and the importance of good regulation in this area, as well as partner with governments as part of efforts in improving food safety.