Shift to modern grocery consumption slows down
Spending in modern grocery, including the online channel, slowed down in the fastest-growing markets as the growth of modern grocery networks “failed to keep pace” with other channels amidst the pandemic, resulting in a decline in market share.
In a report, McKinsey said consumers in India, Indonesia, the Philippines, and Vietnam still prefer traditional grocery due to convenience and proximity.
“The slowdown of modern grocery is due not only to shifting consumer preferences but also to limited store expansion by retailers trying to balance growth and profitability,” the report read.
“In these markets, the adoption of channels such as online remains low due to either limited digital penetration (in India, for example) or fewer players in the market (as is the case in Vietnam),” it added.
For example, in Urban India, traditional grocery dominated the fast-moving consumer goods sales for the year ending in March 2023, contributing 83% to the total sales, with modern grocery accounting only for 8%.
Traditional grocery also led in Rural Vietnam (82%), Indonesia (69%), Urban Vietnam (62%), and the Philippines (48%).
On the other hand, modern grocery dominates in Malaysia and Thailand, with the channel contributing 77% and 46%, respectively, to the total sales.
“This trend could be attributed at least partially to online shoppers returning to offline channels, whose distributed network of stores offers enough convenient options for shopping close to home,” it said.
McKinsey also added that other grocery channels such as direct or door-to-door are seeing sales growth in selected markets such as South Korea and Taiwan.
Related news
Recent research: almost half of Hungarians do not use sun protection cream, and moreover, they do not avoid the sun in the midday hours either
According to a recent, representative research, only 8 percent of…
Read more >K&H: carbon dioxide emissions do not decrease by themselves
In the absence of a sustainability strategy and concrete carbon…
Read more >This is how the Hungarian fans spent at the venues of the national team’s matches
The cities of the European Football Championship in Germany devoted…
Read more >Related news
Large companies are resistant to economic uncertainty
Restrained expectations characterize the domestic corporate sector for the next…
Read more >Company trend in 2024: a more positive half-year, but still a negative message
The lowest number of companies in the last five years…
Read more >The Hungarian Marketing Association for the supply of the profession
The Hungarian Marketing Association is actively working for the future…
Read more >