Online could more than double its share of the overall Chinese grocery retail market by 2020, IGD has forecast.
The market is set to grow by almost 32% year on year driven by the growth of the internet, greater smartphone use, more focused investment from retailers and shifting demographics, the research organisation said.
Online grocery currently has just 3.1% share of the country’s total grocery market - lagging behind the UK at around 7% - but IGD expects this figure to leap to 6.6% over the next three years.
“Internet and smartphone usage is growing across China, while the country’s demographics are changing too - there is a rising population of young, middle class shoppers leading busier lives,” said Shirley Zhu, Asia programme director at IGD. “In turn, this is creating an aspirational class of shoppers who want access to grocery products at the click of a button, and who are also increasingly looking to source international goods.”
Shirley stressed that getting mobile commerce right would be “critical” for grocery retailers looking to sell online as the majority of people in China access the internet via their smartphone.
She also predicted more partnerships between retailers and manufacturers as China’s online grocery channel continues to grow.
China’s grocery market is made up largely of online marketplaces such as Alibaba’s Tmall and JD.com, as well as individual websites for the country’s bricks & mortar retailers.
A number of UK food and drink businesses have secured listings on marketplaces in a bid to take a slice of the Chinese online grocery market.
In September 2015, Sainsbury’s began working with Alibaba to sell a limited number of products on Tmall. United Biscuits also opened a flagship online store that year with Alibaba.
Waitrose followed suit last April by opening its own store on Alibaba’s Tmall with 30 products, and has since expanded its selection to include English wine. The supermarket has predicted that the Chinese market will grow rapidly to become its biggest international business within three to five years.
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