China’s Grocery Market Now Biggest in the World
China has overtaken the United States as the world’s biggest food and grocery retail market, according to the latest research published by IGD. The Chinese grocery sector was worth £607 billion at the end of 2011, while the US market came in at £572 billion over the same period and is the second largest in the world. By 2015, the Chinese market is forecast to be worth £918 billion compared to a US value of £675 billion.
Between 2011 and 2015, the US grocery retail market should see growth accelerating to reach a compound annual growth rate (CAGR) of 4.2%, but China’s rate will be double this at 10.9% over the same period.
According to IGD, all the BRIC (Brazil, Russia, India, China) nations will be in the top five grocery markets by 2015, with India displacing Japan as the world’s third largest grocery market by value. The UK grocery market will be the eighth largest in the world by 2015, worth £162 billion, and achieving a CAGR of 3.2% between 2011 and 2015
Joanne Denney-Finch, chief executive of IGD, comments: “China’s grocery growth story is phenomenal. Between 2006 and 2015, the Chinese grocery market is forecast to triple in value and to be worth nearly a trillion pounds. This rapid expansion has been fuelled by three main factors: rapid economic growth, population and rising food inflation.”
She continues: “Despite its various logistical and bureaucratic challenges, China is a crucial growth market for many of the world’s largest grocery retailers. Even beyond the major cities there are huge opportunities – forecasts suggest there will be over 200 Chinese cities with a population over a million people by 2025. But given China’s size and diversity, it’s essential not to treat the country as one homogenous market.”
In the UK, IGD expects the online sector to perform well, with internet sales boosted by the increasing use of smartphones and tablet computers. Convenience stores, with their increased focus fresh food and tailoring the store depending on local demand, are also expected to be key performer.
