It predicts the top 10 retailers will achieve 10.4 per cent growth by 2022, compared to 5.8 per cent for the overall market, but anticipates this will come through in different forms and at varied speeds.
“The future of grocery shopping is being reinvented in China, where the boundaries between e-commerce, supermarket and restaurants are blurring,” said IGD Asia program director Shirley Zhu. “Facing rapid changes, the leading retailers are stepping up their efforts to build omnichannel capability, enhance in-store experiences and create differentiation. All these measures will help retailers understand and serve their shoppers better, gain a stronger foothold in the market and tap into a larger customer base.”
Exploring the strategies of the leading retailers, IGD has identified five key drivers of growth:
Accelerating online/offline integration
China’s retail landscape is evolving at speed, with digital-savvy customers demanding fast, easy and convenient ways to shop. Online/offline integration has been accentuated by partnerships between retailers.
“Brick-and-mortar retailers in China recognise the importance of providing a seamless online-to-offline experience as a means of adapting to the needs of consumers, offering greater personalisation and more convenience,” said Zhu.
Stepping up foodservice
Retailers in China are blending retail with foodservice, such as allowing shoppers to choose live seafood and have it cooked in front of them then eating it in on-site seating areas.
Introducing new formats
With shopper preference moving toward online and mobile channels, it is easier for smaller formats to target specific customer segments. Small formats can also be a cost-effective option for testing demand.
Digitising loyalty schemes
As well as being easy for members to access and retailers to update, digital loyalty programs allow retailers to collect customer data both online and offline.
Rethinking private label
Many private brands once aimed to be alternatives to main brands, but in a fresh approach, leading retailers are not trying to win purely on price but building trusted brands as a competitive advantage.
“Fresh-food categories are a good starting point,” said Zhu. “Fruit and vegetables, fish and meat are typical categories led by retailers rather than brands. Suppliers should focus on working alongside private label and see it as a collaboration opportunity.”
IGD details these five drivers of growth in its report with retailer case studies and exclusive insights. IGD is a research and training charity for the food and grocery industry.