E-commerce boost for alcohol and fresh food during COVID-19 likely to remain: Euromonitor

By Guan Yu Lim

- Last updated on GMT

Euromonitor says e-commerce boost for alcohol and fresh food during COVID-19 likely to be permanent ©Getty Images
Euromonitor says e-commerce boost for alcohol and fresh food during COVID-19 likely to be permanent ©Getty Images

Related tags China COVID-19 ecommerce fresh food Alcohol Euromonitor

Sales of alcohol and fresh foods on e-commerce in China have surged during the COVID-19 epidemic, with market analysts predicting that the changes in consumer buying habits are here to stay.

In its insights on the impact of the coronavirus on FMCG in China, Euromonitor revealed that during this period, consumer behaviours changed to focus on health and hygiene, while they turned to e-commerce for alcohol, fresh food, and even dairy in the wake of lockdowns.

In the report, it anticipates that the e-commerce growth is likely to grow significantly this year, and beyond.

It added that industries with a mature online presence will see a strong boost in demand in the short term, while still developing online segments will continue to develop.

Alcohol impact

The on-trade channel (supermarkets, retailers, e-commerce etc) accounted for 46.7% of alcoholic drinks volume sales in China in 2019 while the off-trade channel accounted for the rest (53.3%).

Euromonitor said e-commerce would partially cushion the loss in both on-trade and off-trade channels, as consumers flocked to platforms such as Tmall and JD.com for their alcoholic beverages.

While e-commerce only accounted for 8.8% of alcoholic drinks sales in China in 2019, it was still the fastest growing in the off-trade channel, and is now set to surge further.

Instant and fresh food

The report also revealed that instant foods and foods with long shelf lives such as frozen meals, instant noodles, processed meats and seafood are temporarily seeing a surge in sales.

It attributed this to the urge to stockpile food under strict quarantine controls implemented by local authorities.

On the other hand, sales of fresh food on e-commerce has been steadily rising over the years, even before the outbreak, but the epidemic is set to further boost its growth.

In 2019, online sales of fresh foods was valued at more than USD40 billion in China, a steep increase from 2014, where it was valued at around USD12.5 billion.

Euromonitor reported that online sales of fresh foods in 2019 accounted for 6.3% of total retail value, but is optimistic of its fast growth.

Fresh food is a category with rigid demand and a high consumption frequency, is expected to witness accelerated online sales value growth in 2020, under the COVID-19 scenario, due to quarantine policies and people’s reluctance to go to crowded areas such as supermarkets​.”

Euromonitor also expects the growth momentum of e-commerce after the epidemic has the potential to be sustained once the habit of purchasing fresh food online is cultivated.

Dairy

Another category likely to benefit from this outbreak is dairy and dairy products, as consumers become more aware of nutrition and health.

Dairy is a key source of protein, and functional ingredients such as probiotic for many Chinese consumers.

Euromonitor has also observed higher demand for milk and yoghurt, especially shelf-stable products, as the authorities has advised sufficient dairy intake to boost immunity and stay healthy.

All dairy products have also seen a stronger sales increase through online channels during the epidemic period. According to Euromonitor, e-commerce will continue to stay beyond the epidemic.

As the COVID-19 spreads across continents with no signs of slowing, Euromonitor predicts that the impact and trends that emerged from changes in consumer behaviour in China will also be evident in other crisis hit countries.

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