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Online retail sales to hit $2.5 trillion in Asia by 2024
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SME Times News Bureau | 18 Sep, 2020
Riding on the surge in grocery demand in the Covid-19 times, online
retail sales in Asia will grow from $1.5 trillion in 2019 to $2.5
trillion in 2024, with a compound annual growth rate (CAGR) of 11.3 per
cent, a new Forrester report said on Friday.
Due to the pandemic,
adoption of online grocery is getting a boost, with an expected CAGR
growth of 30 per cent during the forecast period and online penetration
doubling from 5.1 per cent in 2020 to 10.6 per cent in 2024.
"Grocery
is the largest retail category, accounting for 35 per cent of total
retail sales in 2019 but just 6 per cent of online retail sales. This
makes it an important category for retailers and one that is going to
drive future growth of online retail sales," said Satish Meena, Senior
Forecast Analyst with the global market research firm Forrester.
"Driven
by the uptick in online grocery adoption due to COVID-19, online retail
sales will grow at a CAGR of 30 per cent from 2019 to 2024 and reach
$359 billion," Meena added.
India is witnessing a surge in demand for online grocery.
The latest Reliance takeover of Future Group's retail business is a major consolidation of organised grocery retail.
In
terms of grocery retail, the revenue of Reliance Retail in FY20 was Rs
346 billion and that of Future Retail's annualised revenue of FY20 was
Rs 100 billion.
Earlier reports said that Reliance's partnership
with Facebook could result in the company becoming a market leader in
the online grocery space.
According to Meena, grocery will also be the category where most marketplaces' investment will be made in the next five years.
Online
retail sales in Asia Pacific will get a boost from new buyers due to
Covid-19, but at the same time, consumer spending will take a hit due to
the slowdown of economies.
China will remain the largest
market, reaching $2 trillion by 2024 and accounting for 50 per cent of
global online retail sales in 2020.
In contrast to Europe and the US, the smartphone is the preferred device for online buyers in Asia Pacific countries.
"In
2020, 75.8 per cent of online retail sales will occur on smartphones,
and we expect online retail sales by smartphone to grow at a CAGR of
13.6 per cent to reach $2 trillion by 2024," Meena said.
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