As Asian retailers gear up for Singles’ Day, the world’s biggest online shopping event this weekend, the Institute of Grocery Distribution (IGD) has forecast that e-commerce in Asia will experience a growth explosion over the next few years.
IGD is forecasting that the region’s largest online grocery retailers will grow on average 34.6% a year between now and 2022.
“Retailers and grocery manufacturers across Asia are embracing the online channel, driven by a number of reasons, such as demographic shifts, rising internet and mobile penetration and improved logistics,” said Shirley Zhu, Programme Director at IGD Singapore.
“However, growth still varies significantly between different countries and retailers. The region’s top eight online retailers are all from China, Japan and Korea, countries with a high adoption of online shopping and more advanced supply chains.”
The education and training charity notes that the region’s top eight online retailers are all from China, Japan and Korea as these countries have a high adoption of online shopping and more advanced supply chains.
China’s JD and Alibaba Tmall are both respectively the largest online grocers in Asia, with Japanese retailer Rakuten following as Asia’s third-largest player.
The world’s largest online shopping event comes to a climax this weekend (11 November) and therefore, there is a heightened focus on online shopping. For instance, on Singles’ Day last year, Alibaba reported sales totalling US$17.8bn – $11bn more than Black Friday and Cyber Monday combined.
“The Singles’ Day festival has essentially grown into a two-month opportunity for brand owners,” says Zhu. “This year many brands started their marketing campaigns weeks before the official kick-off of the event on 31 October. To fully take advantage of the festival, instead of simply offering coupons to shoppers, many brands have designed their product offering, promotions and social content specifically for Singles’ Day, giving them a better opportunity to stand out from the crowd and grab shoppers’ attention.”
However, this big online shopping event poses significant challenges to e-commerce operations and supply chain.
“A high level of impulse purchase means returns are quite common, so that needs to be handled. Another challenge for online retailers and manufacturers following Singles’ Day is how to retain the interest of shoppers after the discounts have come to an end,” explains Zhu.
“However, whether it’s during the Singles’ Day festival or more generally, the size of the prize in online grocery in Asia is undoubtedly huge. To ensure they make the most of this opportunity, retailers and manufacturers must remain agile and flexible, develop their understanding of online shoppers, focus on improving their logistics and ensure they are taking a collaborative approach to this exciting channel.”