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Korea tops the world in online grocery sales

Post a commentBy RJ Whitehead , 10-Jul-2017

© iStock
© iStock

South Korea has been shown to lead a number other developed economies in terms of how widespread online grocery shopping has become there.

The country led a global field in a report by industry tracker Kantar Worldpanel, ahead of the likes of America, Britain and Japan, in the proportion of its online sales compared to physical purchases.

According to the survey, the percentage of fast-moving consumer goods sales via online and mobile channels out of all purchases came to 16.6% in South Korea from 2015-16. 

Japan was second with 7.2%, followed by Britain with 6.9%, France with 5.3% and Taiwan with 5.2%, the report showed. 

America’s share of e-commerce represented just 1.4%, Kantar Worldpanel said. However, as the home of Amazon and other established grocery retailers, it is likely to catch up quickly. 

South Korea also ranked highest in terms of the percentage of households that buy online FMCG products at least once a year, though it was several places behind three Southeast Asian countries and China in terms of how online online purchases had evolved over the previous year. With 109% growth, Thailand led the table, whereas Korea only registered a 41% spurt last year.

The future development of e-commerce is strongly connected to the culture, habits and beliefs of each country,” said Stéphane Roger, who led the study, at a time when Korean hypermarket and supermarket FMCG value sales have been shrinking by -7%.

E-commerce accounts for 4.6% of FMCG sales globally, but represents 35% of its growth—eight times its weight in the market—as companies focus on their online sales strategies, said Eric Batty, Kantar’s e-commerce director.

The format may only reach a small proportion of grocery shoppers, but it’s no surprise that manufacturers are investing considerably in this channel—many of them creating dedicated teams to build their online strategies—because it represents the main accelerator to their future growth,” he said.

Analysts have attributed the growth in web shopping by South Koreans to the aggressive expansion of online grocery delivery services by key e-commerce companies and related start-ups. 

The growing number of single-person households is another factor that has fuelled the demand for online grocery shopping in the country. 

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