Table of Contents
Executive Summary
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- The market
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- Figure 1: Retail value of grocery retailing market, China, 2013-2019
- Figure 2: Best- and worst-case forecast of retail value of grocery retailing market, China, 2014-24
- Companies and brands
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- Figure 3: Retail value of top ten brands in grocery retailing, China, 2019
- The consumer
- Brands can differentiate themselves with mini programs/apps
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- Figure 4: Brand’s satisfaction, by service and attributes
- Wet markets could be strong competitors to O2O retailers
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- Figure 5: Grocery purchase channel
- Fresh Hema performs well in tier one cities
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- Figure 6: Brand frequency, by tier one city consumers
- Figure 7: Key drivers of overall satisfaction with Fresh Hema, September 2019
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- Figure 8: Key drivers of overall satisfaction with Super Species, September 2019
- Cooking at home is mostly preferred
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- Figure 9: Cooking habits
- Unlocking the kid factor
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- Figure 10: Little salespeople at Sam’s Club
- Figure 11: Little salespeople at Sam’s Club 2
- Figure 12: Purchase factors, by family structure
- What we think
Issues and Insights
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- The kid factor can be a money spinner
- The facts
- The implications
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- Figure 13: Sam’s Club training class for ‘little salespeople’
- Group purchase of fresh produce can be a dark horse
- The facts
- The implications
- O2O grocery retailers successfully build brand equity
- The facts
- The implications
The Market – What You Need to Know
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- The grocery retailing market’s health reflects the overall economy
- The grocery retailing market is a perfect embodiment of market selection
- The road to premiumization has just started in the food sector
Market Size and Forecast
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- The grocery retailing market is growing at a constant rate
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- Figure 14: Retail value of grocery retailing market, China, 2013-2019
- The grocery retailing market is headed for premiumization
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- Figure 15: Best- and worst-case forecast of retail value of grocery retailing market, China, 2014-24
Market Factors
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- E-commerce companies speed up the maturation of grocery retailing market
- Systematic upgrade of supply chain endorsed by the government is fuelling market progress
Market Segmentation
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- Food sector is the leader in premiumization
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- Figure 16: Segmentation growth of retail value from 2013 to 2019
Key Players – What You Need to Know
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- Yonghui is the dark horse of the market
- Quality product is what consumers want
- Better shopping experience to meet the need for consumption upgrade
Market Landscape
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- Yonghui takes the No. 3 spot from Walmart
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- Figure 17: Retail value of top ten brands in grocery retailing, China, 2018 vs 19
Competitive Strategies
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- Last-mile warehouses help achieve immediate delivery
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- Figure 18: Snapshot of MissFresh’s supply chain
- Grocerants are on the rise
- The rise of private label is saving major players’ bottom lines
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- Figure 19: Walmart’s Great Value product line by sales popularity
Who’s Innovating?
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- Fresh produce purchased through social e-commerce
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- Figure 20: WeChat group for buying fresh produce
The Consumer – What You Need to Know
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- Fresh Hema is focused on building a premium brand
- Supermarkets/hypermarkets are still irreplaceable
- Consumers married with kids are the future drivers of fresh food retailing
Competitive Analysis – Consumer Perspectives
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- Mini programs/apps the next battlefield for building premium brands
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- Figure 21: Brand’s satisfaction, by service and attributes
- Walmart is shifting focus from opening new stores to profit margin per store
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- Figure 22: Retail value of Walmart China, 2017-19
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- Figure 23: Number of stores of Walmart China, 2017-19
- Walmart should prioritise price point and aftersales service
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- Figure 24: Key drivers of overall satisfaction with Walmart, September 2019
- Yonghui’s next step is to deliver more competitive price points
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- Figure 25: Retail value of Yonghui, China, 2013-19
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- Figure 26: Key drivers of overall satisfaction with Yonghui, September 2019
- Fresh Hema is the leader in satisfying consumers’ needs
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- Figure 27: Financial snapshot of Fresh Hema’s stores
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- Figure 28: Key drivers of overall satisfaction with Fresh Hema, September 2019
- Carrefour remains positive on the foreseeable future
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- Figure 29: Key drivers of overall satisfaction with Carrefour, September 2019
- Vanguard and RT-Mart’s outdated aftersales services in need of digitalization
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- Figure 30: Key drivers of overall satisfaction with Vanguard, September 2019
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- Figure 31: Key drivers of overall satisfaction with RT-Mart, September 2019
Purchase Channel
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- O2O retailers and wet markets could become serious competitors and lead market innovation
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- Figure 32: Grocery purchase channel
- Supermarkets/hypermarkets’ competitive advantage lies in fresh/frozen food and packaged kitchen produce
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- Figure 33: Grocery purchase channel
- Fresh and frozen ready foods are still mostly offline based
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- Figure 34: Purchase channel, fresh and frozen/chilled ready foods
- Young fresh/frozen food buyers frequent wet markets
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- Figure 35: A food stall at Sanyuanli market
- Figure 36: The online marketplace of Sanyuanli
- Figure 37: Fresh/frozen food buyers in wet markets, by age group
- O2O retailers still lack core competencies to replace supermarkets/hypermarkets
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- Figure 38: Purchase frequency of consumers who have shopped at grocery retailing channels vs those who have not, by categories
- Comprehensive shopping websites set to dominate the beauty and personal care market across all city tiers
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- Figure 39: Purchase channel, beauty and personal care products
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- Figure 40: Purchase channel, beauty and personal care products by age
- Food delivery apps are convenient for urgent BPC purchase
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- Figure 41: Ele.me beauty and personal care category search results
- Figure 42: BPC shoppers on food delivery platforms, by family structure
Brand Frequency
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- Fresh Hema is gradually dominating the tier one city market
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- Figure 43: Brand frequency, by tier one city consumers
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- Figure 44: Key drivers of overall satisfaction with Fresh Hema, September 2019
- Figure 45: Key drivers of overall satisfaction with Super Species, September 2019
Cooking Habits
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- Cooking at home is still the main trend
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- Figure 46: Cooking habits
- Consumers cooking frequently choose not channels but brands
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- Figure 47: Fresh/frozen food shopping channels, by cooking frequency
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- Figure 48: Most visited grocery retailers, by cooking frequency
Purchase Factors – Fresh Food
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- Seeing is believing
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- Figure 49: Triggers to purchase fresh food in physical stores
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- Figure 50: Fresh purchasing in physical stores – TURF analysis, September 2019
- Efficiency is crucial
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- Figure 51: Purchase factors, by generation
- Engaging children in the family to increase offline foot traffic
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- Figure 52: Little salesperson at Sam’s club
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- Figure 53: Little salesperson at Sam’s club 2
- Figure 54: Purchase factors, by family structure
Meet the Mintropolitans
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- Physical stores will co-exist with other online channels
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- Figure 55: Trigger to purchase fresh food at physical stores, by consumer classification & age
- Boutique supermarkets are popular among young Mintropolitans
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- Figure 56: Purchasing categories of young Mintropolitans at boutique supermarkets
Appendix – Market Size and Forecast
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- Figure 57: Retail value of grocery retailing market, China, 2013-19
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Appendix – Market Segmentation
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- Figure 58: Spending segments of grocery retailing, China, 2013-19
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
Appendix: Key Driver Analysis
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- Methodology
- Interpretation of results
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- Figure 59: Overall brand satisfaction with supermarket – KEY driver output, September 2019
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- Figure 60: Overall brand satisfaction with supermarket, September 2019
Appendix: TURF Analysis
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- Methodology
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- Figure 61: Fresh purchasing in physical stores - TURF Analysis – September 2019
- Figure 62: Fresh purchasing in physical stores - TURF Analysis – September 2019
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