1. Massive growth for eGrocery in Q2 2020

eGrocery segment has skyrocketed in Q2 registering 5x+ growth YoY thanks to COVID, and we see continued traction even in a post Lockdown world, which is reflective of a paradigm shift in the way the urban consumers, shops for Groceries.

BPC is another segment that has been riding on the wave of COVID. Post a dip in volumes in Q1 (due to lack of promos and discounts) the category has picked up steam in Q2 with personal hygiene segment proving to be the growth engine, within.

Category Mix of Indonesian eCommerce, USD Bn, Annualized GMV for each period

Quarterly shipments – Indonesian eCommerce, Mn/day

2. Category growth story validated from our consumer and platform interviews

Our Consumer research strongly backs the supply side findings on increased adoption of eGrocery segment with 60%+ eGrocery buyers starting to purchase the category online due to the COVID pandemic.

Additionally, there is a strong consumer sentiment towards continued usage of online channel for grocery shopping in a “Post-COVID” world as well.

eGrocery start of usage amongst consumers

​eGrocery usage in the future

3. We have also observed an increased wallet share for eGrocery + ‘trading up’ behaviors which are strong signs of user stickiness in the long run

In addition to consumers coming onboard the online channel for grocery shopping, we have also been seeing an increase in wallet share from eGrocery Shoppers + a trading up behaviour where they are starting to purchase more premium offerings – both indicators of high satisfaction with online channel which augers well for customer stickiness and monetization in the long run.

Online wallet share has increased very strongly especially for meat, beverages and packaged goods

Consumers are trading up for healthier and branded offerings

4. To handle this uptrend in demand, horizontals are making their supply, logistics and warehousing capabilities more robust; Vertical players are also gaining traction by striking some interesting partnerships along the way

The eGrocery segment has become a key focus area across major horizontals with investments being made in supply chain and sourcing to be able to service this increased demand while maintaining a high level of product and service quality.

On the other hand, relatively smaller vertical players are partnering with Horizontals to increase their audience pool and scale up quickly.

Vertical partnerships

5. eGrocery market set to grow 5-6x in 2020

All these supply and demand side factors have stacked up nicely to create a platform for massive growth in the segment.

We estimate the market to grow by 5-6x in 2020, thereby accounting for a sizable portion of the online retail market going forward.

The increased user adoption of eGrocery also augers well for other eCommerce categories. The relatively higher frequency purchases in eGrocery will help build and sustain comfort with online buying, driving up purchases in other segments as well.

eGrocery market size in Indonesia – 2019-2020P, ​USD Bn, GMV for each period