In a year that resulted in a decline in global consumer spending, the online grocery store bucked the trend. This growth is expected to continue in the short term.
According to a new report from the Economist Intelligence Unit (EIU), the online grocery store has expanded from a small pre-Covid base to accommodate the lion's share of online sales in most markets. It also says that online groceries will maintain their momentum versus other product groups until at least 2023, when non-food retail accelerates again.
The special report combines data and forecasts covering 58 markets around the world and forecasts the growth as well as the main opportunities and risks in online trading.
While the pace of online retail growth will slow from 2021, the subsector will continue to expand its share of total retail sales – from around 10% in 2019 to nearly 20% by 2025.
Much of the growth is being driven by two main drivers including developing markets and the growth in online grocery delivery.
While the US will remain a critical market, much of the growth will come from emerging markets in Asia, Latin America, and the Middle East.
According to The EIU, online retailers need to develop winning strategies in three key areas: adopting next generation technologies; Storage and fulfillment; and leverage a new generation of digital salespeople.
Barsali Bhattacharyya, manager, industry briefing at The EIU, says there will be both winners and losers in market transformation depending on retailers' ability to switch online and retain customers.
"As companies try to take advantage of the opportunities that come with relocating online, many will struggle to be profitable," he says.
"In addition to using the latest technology to keep their finger on the pulse of consumers, companies need to investigate which markets offer the greatest potential while overcoming increasing regulatory barriers, cybersecurity and occupational risks."
