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The Asian food market will be $ 4.264 in the next four years. In 2023, the value of that market will be about the same as that of Europe and North America combined, says IGD Asia.
Asia, the world’s largest regional grocery market, is expected to grow at a CAGR of 6% through 2023, according to a new study from IGD Asia. China, India, and Indonesia will be the largest contributors to the region’s top-line growth, accounting for 74% of recent aggregate sales by 2023.
Asia will continue to grow as the world’s largest grocery market over the next five years. It will contribute additional sales to the global grocery market than Europe, Africa, and America. Latina,” said Nick Miles, Director of Asia-Pacific at IGD.
In 2018, the Asian grocery market was worth $ 3126 billion. In 4 years, $ 1.139 billion will be added to this market, reaching a total value of $ 4.264 billion (37% of the global grocery market).
Five countries will contribute to this particular expansion. China will expand its position as the primary grocery market in the region. Despite slowing growth, it is still has a 6% CAGR through 2023. Nick Miles says: “Online retailers will have an increasing influence on China’s grocery landscape, and partnerships will drive the digitization of the retail trade. The geographic focus of retailers is changing as “Tier 1 cities become saturated and seek to establish a presence in lower-tier cities. Additionally, new manned and unmanned store concepts are likely to emerge and change the face of physical retail.
India, the second-largest market in the region, will see an 11% growth in grocery sales. “In India, traditional retail continues to represent more than 95% of the market. The 12 million traditional Kirana stores will continue to be an integral part of the retail landscape. Still, modern retail chains will expand to establish themselves in major cities and urban centers. Online will be one of the significant business channels, with new retail partnerships improving the supply chain and customer reach, “says Miles.
In Japan, Asia’s third-largest grocery market, a declining population, and low spending growth mean the grocery market will have a slower CAGR of 1% to 2023. Nick Miles says: “Collaboration and Consolidation among retailers will remain a key driver for growth in Japan, but their impact on the total retail market will be negligible. Major grocery formats of retailers will face increased competition from drug stores, discount stores, and specialty stores that sell more food and grocery products. Technology and automation will be part of the solution to support the aging of the country’s population.
Indonesia, the fourth-largest market, is expecting to have a CAGR of 8% by 2023. “In Indonesia, traditional trade will account for 80% of the grocery market by 2023, with suppliers and family-owned stores that will be better able to serve the market. Minimarket operators Indomaret and Alfamart will continue to dominate modern commerce, increasing their networks and investing in digital capabilities. The growing influence of existing online retailers and Alibaba and JD.ID’s investment in the market will also play a role. “The modernization of traditional commerce continues to be a great growth opportunity.
As the fifth-largest Asian market, South Korea will have a CAGR of 5%. It will see challenging growth in hypermarkets and supermarkets, currently the country’s two largest food and consumer goods channels. “The importance of convenience in South Korea will increase as retailers. It will open many new stores and invest in existing operations. South Korea has a high-tech, digital-share society and the world’s largest market share for online groceries. It means retailers will continue to invest in operations to stay ahead,” says Nick Miles.
Pakistan, Bangladesh, Vietnam, and the Philippines will also see some of the fastest growth in the region. However Hong Kong will grow at a slower pace, similar to Japan. Convenience and online stores will be the main channels to influence the market.