Asian grocery market worth US$426.4 billion by 2023

Asia will dominate the grocery market globally. Image from Pixabay

New research from IGD Asia reveals that Asia is forecast to generate US$426.4 billion worth of grocery sales by 2023 — almost the same as Europe and North America combined. 

“Asia will continue to extend its position as the world’s largest grocery market over the next five years, contributing more additional sales to the global grocery market than the next three fastest-growing regions in value change terms – Europe, Africa and Latin America,” says Nick Miles, head of Asia-Pacific at IGD.

The food and consumer goods research organisation also predict the top five markets in Asia will account for 83% of the region’s grocery sales in 2023, and 78.8% of total growth over the next five years.

China for example, will extend its position as the region’s leading grocery market. Despite growth slowing, it is still expected to have a CAGR of 6% until 2023, says IGD. 

“Online retailers will have an increasing influence on China’s grocery landscape, with partnerships fuelling the digitisation of retail. Retailers’ geographic focus is shifting as first-tier cities become saturated and as such, they are looking to establish a presence in lower tier cities,” says Miles. “Also, new manned and unmanned store concepts are likely to emerge and change the face of physical retail.”

Asia's retail landscape is very diverse, says IGD.  (Photo from Pixabay)

On the other hand, India, the region’s second-largest market, will see the fastest growth to 2023, with a CAGR of 11%. “In India, traditional retail continues to make up more than 95% of the market,” says Miles. “Online will be one of the most significant modern trade channels, with new retailer partnerships improving supply chain and customer reach.”

In Japan, Asia’s third-largest grocery market, a declining population and low spending growth means that the grocery market will have a slower CAGR of 1% to 2023. Meanwhile, Indonesia, the fourth-largest market, is set to have a CAGR of 8% to 2023.

As the fifth-largest Asian market, South Korea will have a CAGR of 5% and see challenging growth in hypermarkets and supermarkets, currently the country’s two largest food and consumer goods channels.

Miles explains: “Asia’s food and consumer goods market possesses huge growth opportunities: The combination of the largest regional grocery market and strongest real growth prospects of any region means Asia should be on any suppliers’ radar for growth.”

He adds that growth will vary considerably by market: Indonesia, Pakistan, Bangladesh, Vietnam and the Philippines will see some of the fastest growth, while Japan and Hong Kong some of the slowest. China and India will dominate. 

“Given the scale of both markets they will have an increasing influence on the region, but a strong local understanding of each market is required to win,” he says.

 “Convenience and online will see the fastest growth. Asia’s market landscape is very diverse, but we expect the convenience and online channels to see the greatest investment and fastest growth over the next five years. Asia is also a hotbed for innovation and we can expect this to accelerate over the next five years, with retailer partnerships and new technologies driving change,” he concludes.

Find more insights at IGD Asia: https://asia.igd.com/about/free-content