Huge opportunities in Asian grocery markets

Asia’s growing demand for meat and its evolving grocery market offer huge opportunities for UK exporters, delegates at the AHDB Outlook conference were told this week.

Nick Miles, Asia-Pacific region manager, IGD, described the continent’s grocery markets as “rising up the ranks in terms of world importance” during his talk on: ‘Understanding Asia’s rapidly evolving retail markets’.

He said meat consumption in Asia was forecast to achieve a compound annual growth rate (CAGR), of 13% between 2014 and 2020. This compared to a CAGR of 3% predicted for Europe, 8% in North America, 11% in Oceania and 22% in Africa.

Within Asia itself, Japan was forecast to see a CAGR in meat consumption of 1%, 9% in Korea, 10% in China - driven by increasing demand for pork, 19% in India and 20% in south-east Asia.

Trend-wise, there is a big focus on communicating the quality and provenance of meat products, with a lot of imagery around stores to show where the meat has come from and how the animals are raised, for example. Miles said that international meat products played an increasingly important role in stores, “with exclusive products a great selling point”.

There is also an increasing focus on traceability, with meat packaging in Tesco stores in Thailand, for example, featuring QR codes, which consumers can scan to find out which farm the meat has come from, nutritional information and even recipe ideas. Meanwhile RT Mart in China openly shows animals being butchered in-front of shoppers, and Tesco Malaysia displays whole carcases in glass-fronted cabinets.

Miles said there were huge opportunities for fast-moving consumer goods (FMCG) in the region, with online and convenience the fastest-growing grocery channels, although local understanding was key to success. He added that meat and dairy had opportunities to engage with consumers more than other categories, through demonstration kitchens in-store, for example.

Growth in mCommerce

While traditional trade will still play an important role in Asian markets going forward, modern trade is forecast to grow across these markets, with the highest levels of growth expected in Indonesia and the Philippines.

Reasons why traditional trade is still popular include the desire to shop locally – especially in heavily populated cities such as Beijing where traffic is a big problem. Consumers also valued quality and freshness very highly in these markets, and liked the personal service offered by traditional grocery markets, he explained.

However the online and digital age is growing in importance, with mCommerce (mobile commerce) expanding rapidly. One retailer was even targeting 40% of its sales through its mobile site last year.

Giving a general overview of the Asia through numbers, he said that, by 2020, 59.4% of the world’s population would be living in Asia, with a rapid shift in growth of affluent consumers resulting in a prediction that Asia would also house 54% of the world’s middle class (a figure which was forecast to be 29% by 2009).

Asia was also predicted to achieve a CAGR of 4.9% in gross domestic product between 2014 and 2020, and year-on-year growth in the grocery market of 8.5%.

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