Five trends Asia's groceries will carry over in 2021

The previous year saw a rise in delivery provider tie-ups and omnichannel evolution.

Whilst uncertainty remains for Asia’s grocery retail sector over the next 12 months, there is optimism that 2021 will be a year to rebuild and capitalise on the opportunities that have arisen in the new normal across Asia, according to a report from IGD.

One such opportunity are the new solutions that businesses came up with during the pandemic to make their operations, products, and services more accessible. These new solutions have provided new growth opportunities for retailers, and are expected to accelerate post-pandemic.

For instance, retailers have been teaming up with third-party delivery providers such as foodservice delivery businesses to make their offers more accessible and offer a new solution for "impulse ecommerce".

Foodpanda has recently added 2,500 7-Eleven stores to its app across Singapore, Malaysia, Taiwan, and the Philippines. The agreement follows a six-month trial which saw orders via the Foodpanda app grow 50% month-on-month.

There has also been a surge in demand for online grocery retailing in 2020 across Asia. Retailers with existing operations have rapidly developed their services, whilst those who were previously not online have launched services in the space of just a few months.

This trend is expected to remain elevated after the pandemic, with retailers expanding their services, strengthening their capabilities, and boosting capacity. For example, FairPrice in Singapore has upskilled its in-store pickers, plus is offering two-hour delivery service.

Furthermore, the perfect storm of mobile first internet access, a young and tech savvy population, highly advanced social platforms, plus high social media penetration mean that Asia is leading the world in the digitisation of the path to purchase.

With this, retailers and suppliers are expected to continue to enhance their capabilities, using new techniques to influence purchasing behaviours both in-store and online.

Dairy Farm has brought its brands and shops under its new digital first rewards club, yuu. With daily content, personalised offers and lots of other features, it emerged as the most downloaded free app in Hong Kong in 2020, with 2.8 million downloads in just four months.

Still, even with the growth of ecommerce over the coming years, stores will remain important, but IGD said that they will need to evolve to survive. Stores have a vital role to play in supporting the growth of ecommerce, whilst ecommerce can help support store operations.

China is leading the way in omnichannel evolutions, whilst across Asia we expect more retailers to adapt and flex stores to achieve seamless online-to-offline operations.

“Shoppers will increasingly not differentiate between the two channels and therefore the challenge for retailers and suppliers is to provide a seamless experience across both,” said Nick Miles, IGD’s head of insight - Asia Pacific.

Beyond digitally driven trends, health and wellness has been growing in popularity for a number of years, with the importance of a healthy diet, personal well-being and hygiene, becoming more important for consumers in 2020.

“This provides a great opportunity for retailers and suppliers to differentiate themselves and supercharge relevancy of their offers. The most advanced businesses will elevate their attention on this going forward, providing affordable choice, new solutions and advice for shoppers,” Miles added.