These have been classified as: Leap-frogging pioneers, Pioneers, Laggards and Resisters.
“Online grocery shopping is on an unstoppable march, taking an ever-greater share of the food retail market,” said Dennis Jönsson, Tetra Pak Group President & CEO.
“[Offline] and online are now merging into an “omnichannel” age, where consumers expect to be able to buy whenever, wherever and however they choose.”
The results and analysis in the report were a result of detailed consumer research, a global market segmentation study, as well as interviews conducted with e-retailers.
In the first classification, Leap-frogging pioneers were described as ‘developing markets with fast growth in online grocery, driven by infrastructure development and demand for convenience’ in the report. These markets include Shanghai, Bangkok and Jakarta.
Rapid development of online grocery and the corresponding market shares are predicted for these countries between 2016 and 2030. The largest growth is expected for Shanghai, at 7.3%.
In contrast, very limited growth in online grocery is expected for Resister markets like India, where traditional trade is expected to maintain dominance due to ‘deep penetration and emotional attachment with consumers’.
India’s online grocery market is only expected to grow by 0.2% from 2016 to 2030.
Falling in the middle range are Pioneers like South Korea, which have developed markets and fast online grocery growth, but relatively poorer infrastructure development and demand.
Tetra Pak described this as ‘thanks to rising consumer confidence in online delivery and quality’, and forecasted a respectable 6.5% growth in the South Korean online grocery market by 2030.
Laggards comprise markets that are still classified as developed, but in which the report predicts slow online grocery growth due to increasing quality and innovation in modern trade like convenience stores.
Japan is identified as a laggard, particularly due to the outstanding quality of its convenience stores.
The importance of improving customer experience
As consumers are exposed to ever-increasing amounts of information online, this means “brands need to work harder than ever to capture attention and get their message across”, said the report.
“Arresting and, crucially, simple messaging is vital, particularly as mobile is increasingly the device of choice.”
Packaging was also identified as a vital part of a positive consumer experience.
“For e-retailers globally the most important performance factors remain speed of delivery and quality of products shipped to consumers, along with space-efficient packaging to optimise logistics,” it said.
“Space-efficient packaging appeals to consumers […] particularly in urban areas where living space is often tight: it is viewed as a performance factor and is in demand for consumers in […] China.”
Among the five ‘hot factors for 2025’ identified for online retail, four relate to packaging.
These include: Augmented reality via smart packaging; Unboxing experience of online grocery packages; Personalised packaging and online-only products and Tactile technology allowing consumers to “feel” the product when searching for and discovering the product.
“Smart packaging, with features that enable digital purchase and enhanced consumer experience, is particularly highly regarded by Chinese shoppers (where scanning QR codes is already commonplace),” it added.
Trends shaping the future of online grocery
The report also identified four major trends that are influencing the growth of online grocery.
First of all is Convenience, which is considered ‘the main driver of online grocery in all markets’. This includes features like easy replenishment via features like a favourites list and automatic replenishment; as well as super-fast delivery and/or collection within as little as 10 minutes.
“The easier brands and retailers can make [the shopping] experience, the more successful they will be,” Tetra Pak predicted.
Next is Technology, as supply chains look set to be affected by various forms of new technology like Radio Frequency Identification (RFID) and robotics.
Sustainability is also rapidly gaining traction, a trend which has particular impact on packaging. In this, plastic is undergoing the most pressure especially with many high-profile initiatives in progress to reduce its impact on the environment, as well as decrease its use as a whole.
The awareness surrounding recycling and the severity of food waste issues is also on the rise, and it is becoming increasingly important for retailers and brands to pay attention to this.
Last on the list is Personalisation, which are described as a ‘major driver’ used by online businesses, as a result of increasing customer in niche products that are difficult to find in mainstream stores.
“Looking ahead, e-retailers and brands are expected to appeal to consumers on an ever more personal level. Customisation of products and personalisation in consumer journey and delivery are expected to be key differentiators going forward,” said the report.
“This is one of the main trends [in play], looking ahead to 2025.”