Chinese grocery sales are set to grow by a third between now and 2020 and reach US$1.5 trillion per year, according to new forecasts from IGD.
While China will comfortably retain its position as the largest grocery market in the foreseeable future, other markets will grow faster.
IGD predicts grocery sector in India will grow by nearly 80 per cent and be worth just over US$900 billion by 2020. IGD also estimates Nigeria’s grocery market will achieve the fastest growth of the largest markets, increasing in value by 85 per cent to hit a little more than US$300 billion by 2020.
The other ‘MINT’ countries will also experience rapid growth – grocery sales in Mexico, Indonesia, and Turkey will increase by nearly 40 per cent, 63 per cent, and 61 per cent respectively.
Indonesia’s grocery market will be worth almost as much as the UK’s (ranked seventh in the world) at US$351 billion by 2020.
Joanne Denney-Finch, CEO of IGD, says while grocery industry growth prospects appear limited in Europe at the moment, this is a time of tremendous opportunity for grocery companies further afield.
“The vast majority of global grocery growth will come from Asia, Africa and the Middle East supported by increasing affluence, urbanisation, and rising population. With many European products and brands highly regarded in these regions, this will be a boom time for companies with export skills,” Denney-Finch said.
“Although the Chinese growth rate is slowing, it’s still very impressive, particularly in ‘tier three and four cities’. These are regional, medium-income cities, undergoing rapid development. There are many more opportunities for retailers and Western brands. For example, online grocery will enjoy explosive growth in China, though from a modest base, tripling in size between now and 2020. This will be powered by more Chinese having access to the internet through smartphones and other devices.”
Denney-Finch said in India, while traditional stores will continue to take the lion’s share of the grocery market, consumer spending per capita in real terms will grow faster in the subcontinent than in any of the top grocery markets.
“Combined with an expanding working-age population this will support the growth of modern convenience and supermarket retailing. Retailers are also rapidly setting up online grocery services hoping to tap into the potential of India’s half a billion smartphone users. Despite restrictions on foreign direct investment (FDI), international retailers continue to see the potential of investing in India.
“If the expected effects of inflation are stripped out, then India would be the fastest growing of the largest grocery markets while most of the MINT countries would also appear higher up the growth rankings,” she said.
This story first appeared on Inside Retail Asia