The growth rate of online grocery sales in Asia slowed down in 2023, according to a report by McKinsey.
 
In every nation included in the report, online sales growth slowed. Among the noteworthy countries, in Indonesia the growth rate slowed from 100.4% to 34.4%. In Thailand, it fell from 33.9% to 9.2%. In addition, online baskets grew smaller.
 
South Korea is leader in terms of online sales. A full 30.1% of grocery sales occur online, although South Korea’s rate of growth fell from 16.5% to 13.6%.
 
The McKinsey report outlined four other trends shaping Asian grocery retailers:
 

• Shoppers more intently looking for value
• Nonfood discretionary spending increasing, for example on beauty supplies
• A slowdown in the transition to modern grocery stores versus traditional outlets
• Smaller formats gaining in popularity

 
“Shrinking basket size has increased margin pressure for the e-tailers and omnichannel players. To date, online platforms continue to be unprofitable for most players, in part due to the persistently high costs of customer acquisition and promotion. The consumers primarily shop online to find deals and discounts, which also creates challenges for retailers,” McKinsey wrote.
 
Convenience retail leaders from across Asia are gathering in Seoul, South Korea, March 5-7 for the 2024 NACS Convenience Summit Asia.