Shopping groceries for home-delivery online - Who is doing that?

SINGAPORE: Online shopping has no doubt seen a boost thanks to continued increases in mobile adoption and broadband penetration, particularly in developing regions. Comparatively, Asia-Pacific consistently exceeds the global average for adoption of online retailing options.

Ordering online for home delivery appears to be the most commonly preferred flexible retailing option in the region, with particularly high usage in China, as per a new report. More than one-third (37 per cent) of Asia-Pacific respondents, and even more in China (46 per cent), say they use an online ordering and delivery service.

Furthermore, the percentage of respondents who are willing to use digital retailing options in the future is highest in largely developing-market regions: Asia-Pacific (60 per cent on average), Latin America (60 per cent) and Africa/Middle East regions (59 per cent), compared to Europe (45 per cent) and North America (52 per cent). While the appetite for buying groceries online is at high levels around the world—more than half of global respondents (55 per cent) are willing to give it a try—digital natives are leading the charge.

Who makes up this adventurous group? The consumers who grew up with digital technology, of course: Millennials and now Generation Z. These consumers have an unprecedented enthusiasm for—and comfort with—technology, and online shopping is a deeply ingrained behavior.

When looking at six e-commerce options (home delivery, in-store pickup, drive-through pickup, curbside pickup, virtual supermarket and automatic subscription), usage is greatest among the youngest respondents in Nielsen’s Global E-commerce and The New Retail Survey, and they’re the most willing to use these options in the future.

For example, 30% of Millennials (ages 21-34) and 28 per cent of Generation Z (ages 15-20) respondents say they order groceries online for home delivery, compared with 22 per cent of Generation X (ages 35-49), 17 per cent of Baby Boomers (ages 50-64) and nine per cent of Silent Generation (ages 65+) respondents.

“Millennials are at the beginning of their careers and are starting to form households, while the oldest members of Generation Z will soon be graduating college and joining the workforce,” said Patrick Dodd, president, global retailer vertical, Nielsen. “These generations will shape our economy for decades to come. Therefore, it’s critical that retailers and manufacturers understand how these consumers are using technology and include digital touch points along the entire path to purchase.”

Why is online shopping for FMCG so prevalent in Asia-Pacific compared with the rest of the world? A few factors are at play. First, the region’s rapid urbanization and high population density make the home delivery model economically viable, particularly when coupled with low labor costs, as has been the case in China. In addition, booming smartphone ownership and usage have created huge mobile commerce opportunities. Finally, in China in particular, food safety concerns have driven consumers in search of high-quality goods online.