© IGD 2015
Nick Miles, Asia-Pacific Region Manager
Prepared for:
© IGD 2015
Today’s presentation
Summary
Trends in Asian grocery retailing
Asia’s evolving grocery markets
Source: IGD Research
© IGD 2015 Source: theatlantic.com, UN Population, OECD January 2010, USDA economic research service, IGD Datacentre
59.4% of the world’s
population
54% of the global middle class
4.9% forecast GDP
CAGR 2014-20
8.5% grocery market CAGR 2014-20
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Asia’s grocery markets rising up the ranks
Source: IGD Datacentre
9%
12%
1%
7%
5%
9%
14% 14%
5%
9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
500
1,000
1,500
2,000
2,500
CA
GR
(2
01
4-2
02
0)
Gro
cery
mar
ket
valu
e U
S$b
n
2014 2020 CAGR
2020 Global Market Size
Ranking 29 1 3 6 10 17 20 21 26 27
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Traditional trade will continue to play a strong role
Source: IGD Datacentre, Retailers, IGD Research. Tracked modern retailers only
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Modern trade market size (estimates)
2012 2015F 2020FDense urban populations
Wealth disparity
Personal service
Quality and freshness
Government policy
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1%
5%
6%
8%
7%
18%
34%
44%
45%
1%
6%
7%
10%
9%
20%
37%
47%
50%
India
China
Vietnam
Philippines
Indonesia
Malaysia
Thailand
South Korea
Japan
Top 10 retailer market shares aggregated
2020 2014
Modern trade development varies significantly
Source: IGD Datacentre, Retailers, IGD Research. Tracked modern retailers only
Small number of strong retailers
National retailers dominate
Highly fragmented
© IGD 2015 Source: Datacentre, Retailers, IGD Research. Tracked modern retailers only
Hypermarkets
Supermarkets
Convenience & Forecourt
Discount
Online Grocery
42.1% 42.0%
18.7% 18.4%
38.3% 38.4%
0.4% 0.3%
c. 0.5% c. 1%
2014 channel share
Trend 2020 channel
share
Online and convenience the fastest growth channels
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Domestic and regional retailers lead the way
Source: IGD Datacentre, Walmart sales include Yihaodian of which it currently owns 51% share
4% 4%
11% 11%
4% 4%
8%
2%
8%
1%
6% 7%
9%
14%
8%
13%
9%
5% 6%
2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
CA
GR
20
14
-20
20
Sale
s, U
S$ (
mn
)
Top 20 grocery retailers in Asia in 2020F
2014 2020 CAGR 2014-2020 Retailers with HQ outside Asia
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India
19%
Source: OECD, FAO
Meat consumption continues to grow…
North America
8%
Latam
11%
Europe
3%
Total meat consumption to grow 10% (2014-2020)
Japan
1%
S Korea
9%
China
10%
Oceania
11%
SE Asia
20%
Africa
22%
Asia
13%
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S Korea
11%
Source: OECD, FAO
…and dairy demand will also be dictated by Asia
Total dairy consumption to grow 12% (2014-2020)
Oceania
10%
Latam
13%
North America
12%
Africa
17% SE Asia
19%
China
22%
India
24%
Europe
4%
Japan
2% Asia
21%
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Satisfying the ever more
sophisticated Asian shopper
Communicating quality and provenance
Showcasing product
expertise
Responding to changing lifestyles
Source: IGD Research
Trends influencing your categories
© IGD 2015 Source: IGD Research
Categories delivering a clear point of difference
Wumart, China Casino, Thailand
Yonghui, China Hypercity, India
© IGD 2015 Source: IGD Research
Middle classes demanding more and better products
Wide range – Fairprice, Singapore
Safety and hygiene – Aeon, Malaysia
Health and wellness – Aeon, Malaysia
Premium cuts – City Super, Hong Kong
© IGD 2015 Source: IGD Research
New and exciting products a key feature
Aeon, Japan Walmart, China Aeon, Malaysia
Great, Hong Kong Aeon, Malaysia
© IGD 2015 Source: IGD Research
Provenance and welfare has grown in importance
International – CR Vanguard, China
Welfare – ParknShop, Hong Kong
Natural – Green & Safe, Hong Kong
Traceability – Tesco, Thailand
© IGD 2015 Source: IGD Research
Imagery around the store to show quality
Walmart, China
Walmart, India
Cold Storage, Singapore
Homeplus, South Korea
© IGD 2015 Source: IGD Research
Counters and special features to engage shoppers
Tesco, Malaysia
Ito Yokado, Japan
Great, Hong Kong
RT Mart, China
© IGD 2015 Source: IGD Research
Education and expertise to differentiate
Aeon, Malaysia Aeon, Malaysia
Central Food Hall, Thailand City Super, China
© IGD 2015 Source: IGD Research
Capitalising on changing lifestyles
Convenience – 7-Eleven, Thailand Experiences – Ito Yokado, China
Meal solutions – Big C, Thailand Food Service – Aeon, Malaysia
© IGD 2015 Source: IGD Research
Online and digital becoming more important
Home delivery – City Super, China Innovation – Tops, Thailand
mCommerce – Yihaodian & Tmall, China Digital engagement – Jasons, Hong Kong
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Trends will vary based on market development
Source: IGD Research
Time
Re
tail
con
cen
trat
ion
TRANSACTIONAL COLLABORATIVE
Introductory advice and expertise in-store
Cooking advice
Engaging experiences
Basic range
Digital engagement
New and exciting products Provenance
Engaging displays
HK SINGAPORE
MALAYSIA
CHINA
INDONESIA
VIETNAM
CAMBODIA
TAIWAN
THAILAND PHILIPPINES
Stage 1: Race for space
Stage 2: Process Mode
Stage 3: Sweating the Assets
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• Asia’s grocery market is rapidly evolving
• Fierce competition means that retailers want to differentiate
• New middle class = huge opportunity for growth
• Vary your approach on a market by market level
• Local understanding is key to success
• Transparency and authenticity will become more important
Summary – key points to take away…
Source: IGD Research
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