1. eGrocery is set to grow into a USD 9 Bn+ market by 2020 with Indonesia accounting for the majority of this
Grocery e-tail market has seen massive jumps in 2020.
Particularly in Indonesia, Horizontals were already moving slightly towards wider FMCG and Fresh offerings; this was boosted by COVID when they were able to leverage their existing supply chain investments over the previous year.
Among other markets, the penetration levels are lesser, however there are spurts of growth emerging and new players sprouting up to tap into this massive TAM.
eGrocery GMV in SEA – 2020, Y-O-Y growth from 2019-20
2. 4 types of players exist in the market currently, with horizontal e-tailers dominating from a market share standpoint
Different types of players exist in the market, however horizontal e-tailers currently command majority share and are relatively more strong in the dry FMCG segment.
B2C and C2C verticals are relatively newer and majority of them have had funding support in the past couple of years. These players are expected to grow rapidly after 1-2 years of strong base building.
The debate between inventory and marketplace models in eGrocery is a significant one with each model having its pros and cons. While the former offers good profitability prospects, the latter helps achieve massive scale in a short period of time.
Split of eGrocery in SEA by type of player, Value split
3. Winning play in eGrocery will revolve around providing a consistent product/service experience to customers, at good prices
The online consumer is evolving rapidly and their platform preferences are starting to be driven by other parameters as opposed to just best prices/value for money.
For eGrocery in particular, depending on whether it is an impulse purchase or a planned one, there are different set of parameters that assume importance in choosing the platform.
Each type of platform we discussed in the earlier section has some strong value proposition that resonates with the consumer, helping them grow.
However, on a forward looking basis, players need to closely evaluate which of these parameters will start assuming more importance and could then become a deal breaker/maker for them.
Consumer decision criteria (post COVID)