The State of Online Grocery Retail in Europe 2015

The State of Online Grocery Retail in Europe 2015

Published: July 8th, 2015

http://www.syndy.com/

The egrocery market is growing fast with an expexted value of €80 billion by 2018

4 trends are shaping the egrocery industry

1. Growing Diversity of Players

•Traditional Players (Brick and Click)

•Pure Players

•Technology, Ecommerce and Logistics Giants Expanding to Egrocery

2. Growing Attention to Omnichannel

Tesco (UK) aims to have every arm of its business featuring a digital aspect.

Walmart (US) plans to spend up to $1.5 billion in 2015 to offer the best omnichannel experience to its consumers.

Tesco’s 3D virtual store

3. Increasing Number of Mobile Transactions

Mobile purchases will account for €100 billion by the end of 2015.

3 out of 10 online transactions are completed via a mobile device.

4. Delivery Model Optimization

vs

Home Delivery Pick-up

How is Egrocery Doing Across Different Countries?

The UK

The Netherlands

Germany

France

The US

India

The UK

Grocery retail market size: £174.5 billion

Online grocery retail market size: £7.7

billion

Penetration of online grocery shopping (%

of the total population): 25%

Online shopping and Internet usage

Online grocery retail Ecommerce is the fastest growing retail channel in the UK

UK’s egrocery market is expected to double by 2019

UK’s egrocery market is the most developedin the EU, worth £7.7 billion

Market highlights

• Tesco is cutting back on physical store openings in order to focus on the online channel.

• Asda plans to roll out 1,000 pick-up points, and make same-day procurement the norm.

• Sainsbury’s aims to put personalization at the center of its online experience.

• Ocado, the world’s largest pure online grocery player, reported its first profitable year in 2014.

• Ocado started leveraging its know-how by offering its infrastructure, and operating capabilities to power third-party online retail enterprises.

The Netherlands

Grocery retail market size: €33.8 billion

Online grocery retail market size: €0.5 billion

Penetration of online grocery shopping (% of

the total population): 15%

Fastest growing egrocery market in the EU, driven by traditional retailers

The pick-up point network in the Netherlands grew 680% since January 2013

71% of the total population shops online


Online grocery retail

• Albert Heijn is the current undisputed egrocery market leader controlling 53% of the market.

• The Dutch online grocery retail market is expected to catch up with the leading markets, like the UK and France, within the next 2-3 years.

Market highlights

• New egrocery market players: from big retailers (such as Jumbo) to smaller retailers (like DEEN), to new start-ups, will be the key factor driving growth of the Dutch egrocery market.

• Following Instacart’s success in the US, entrepreneurs are trying to introduce similar egrocery concepts to the Netherlands.

Germany

EU’s 2nd largest ecommerce market

Egrocery represents 0.8% of all grocery sales

38% egrocery market growth in 2014


Online grocery retail market size: €2 billion





Market highlights

• Allyouneedfresh.de, an online grocery retailer owned by DHL, is bringing new standards to the egrocery market in Germany. Its reliable delivery network (provided by DHL) allows consumers to track their orders, personalize their preferences, and have groceries delivered within the same day.

• Traditional retailers - EDEKA and REWE are investing significantly to expand their online offerings.

• Amazon and eBay are the most popular choices for consumers when purchasing CPG products online.

France

Egrocery represents 3.6% of all grocery sales (€8.8 billion)

Traditional players dominate the egrocery market

Largest pick-up point network in Europe (3000+)


Online grocery retail market size: €8.4

billion





Market highlights

• Pick-up points are used to handle 8 out of 10 online grocery orders in France.

• 80% of the French can reach a pick-up point within 10 minutes from their home or office.

• Casino Group leads the online grocery sector with a 25% market share, followed by E.Leclerc with 18%.

• Houra.fr, launched in 2000, was the first online marketplace for groceries in France. The company claims to offer the largest online grocery assortment in the country with more than 55,000 products.

The US

Grocery retail market size: $594.4 billion

Online grocery retail market size: $18.0 billion

Penetration of online grocery shopping (% of the total population): 20%


Egrocery accounts for 3% of all grocery retail sales

Pure online players lead way in egrocery

Membership models, like Amazon Prime, are driving the adoption of online grocery shopping


Market highlights

• The US market as a whole, only has a small part of all retail sales completed online.

• The picture is completely different in large metropolitan areas (New York, L.A., Seattle) where most of the online grocery players operate.

• Walmart has crafted a new digital strategy (planning to invest between $1.2 and $1.5 billion in 2015) in order to deliver the best omnichannel experience to consumers.

• Pure online players to watch in the US: Instacart AmazonFresh FreshDirect Peapod Google Express Jet.com

• Kroger, one of the largest supermarket chains in the US, is growing its presence online through acquisitions.

The emerging market: India

No. of online shoppers: 35 million

Grocery retail market size: $365 billion

Online grocery retail market size: $100 million

Stalls (Kiranas), mini marts and kiosks account for 98% of all grocery sales

Egrocery market is expected to reach the value of $10 billion by 2020

VC’s invested $100 million to egrocery startups across 2014 – 2015

Growth potential• By 2020 the market is expected to grow more

than 100 fold.

• India’s immense number of Internet users will

be a decisive factor driving online grocery

adoption.

• Ecommerce giants Flipkart and Snapdeal have

already started adding grocery products to their

online ranges and Amazon.in launched a

gourmet and specialty food store in October

2014

Online shopping and grocery retail

Market highlights

• Favorable demographic and economic conditions, spread of internet and the absence of strong traditional supermarket chains operating online, created an opportunity for a number of innovative pure online players to emerge in the egrocery market.

• BigBasket.com is the largest and best-known online supermarket in India. The pure online player currently operates in six major cities and had $40 million in revenue in 2014.

• Popular Indian egrocers like Grofers, Pepertap along with the ecommerce giant Amazon, are running new initiatives to bring the 14 million Kirana shops and their assortments online.

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The State of Online Grocery Retail in Europe 2015

Retail

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