China Online Grocery Market Size, Growth, Trends, Forecast: By Type of Category: Grocery and Staples, Fruits and Vegetables, Others; By Platform: Website, Mobile Application; By Payment Method: Online, Cash on Delivery; Regional Analysis; Market Dynamics: SWOT Analysis, Porter’s Five Forces Analysis; Competitive Landscape; 2024-2032

China Online Grocery Market Size

The China online grocery market reached a value of nearly USD 145.58 billion in 2023. The market is being driven by the robust growth of China’s grocery market. China is the second-largest market for grocery globally. China's online grocery market is expected to grow at a CAGR of 26.7% between 2024 and 2032.

China Online Grocery Market Outlook

• The online grocery market in China has experienced significant growth, with digital grocery sales reaching USD 66.43 billion by the end of 2020, accounting for 14.6% of total grocery sales.

• The market growth has been driven by factors such as the convenience of delivery, efficient searching for items, avoiding crowds, ease of reading product reviews, and a wide selection of products.

• Companies like Alibaba, JD.com, Pinduoduo, and Meituan, as well as startups like Missfresh and Dingdong, have been instrumental in providing diverse platforms for online grocery shopping in China.

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China Online Grocery Market Growth Rate

An online grocery platform can be a website or a mobile application of a supermarket or a local grocery store that allows ordering grocery online, or an e-commerce service selling grocery. These platforms sell the fruit, vegetables, and other household items.

The key drivers aiding the growth of the China online grocery market include the country's significant e-commerce and retail sector. It was the largest e-commerce market in 2016 with sales of nearly USD 366.1 billion. The e-commerce industry is also being aided by the supportive policies of the Chinese government. The government is driving the growing penetration of the e-commerce industry, especially in the rural areas, by building infrastructure to aid the e-commerce sector regionally. Although the e-commerce industry is dominated by apparels and footwear, online grocery is a small but fast-growing segment in the industry.

Alibaba and JD.com are largest online grocery retailers in the market, with Alibaba expected to expand its reach both domestically and globally following positive consumer response. The packaged food sector dominates the online grocery sector in the country. In 2016, online sales of packaged food surpassed USD 18.4 billion, with baby food, dairy, rice, pasta, and noodles being popular among Chinese consumers. Other important segments in the online grocery sector are beverages, fresh foods, and packaged products.

Key Trends and Developments

Increasing adoption of digital payments, expansion of product categories, and focus on improving logistics is positively impacting the China online grocery market expansion

April 2024

JD.com has significantly increased its use of AI on its platform by unveiling a large language model called ChatRhino for enterprise use. It combines general data with native intelligent supply chain data to offer targeted solutions across various industries like retail, logistics, finance, and healthcare.

April 2024

In China, Pinduoduo has been gaining ground on JD.com, the country's second-biggest online retailer, by focusing on inexpensive groceries and household items. A 2023 report by Goldman Sachs estimated that Pinduoduo accounted for 19% of China's e-commerce market due to its focus on lower prices for group purchases.

June 2021

Alibaba's has introduced a high-tech supermarket like Freshippo, which serve as both advanced shopping centres and fulfilment centres, ensuring rapid delivery within a three-kilometre radius. The concept of "New Retail," coined by Alibaba's co-founder Jack Ma, has led to a significant increase in online sales of groceries.

Increased Adoption of Digital Payment Methods

This shift towards digital payments is driven by the convenience it offers and the growing acceptance of digital transactions among Chinese consumers. The trend is expected to continue, with online payment methods, such as Alipay and WeChat Pay becoming the preferred choice for grocery shopping online.

Growing Importance of Livestreaming Commerce

This trend involves farmers directly engaging with consumers through short-video platforms like Kuaishou to sell their products. For example, Pinduoduo, a leading e-commerce platform in China, has integrated livestreaming features to allow farmers to showcase their fresh produce and interact with customers in real-time.

Expansion of Product Categories

Online grocery platforms like Alibaba's Tmall Supermarket and JD.com's JD Super are increasingly offering a wider range of products, including fresh foods, beverages, and packaged goods. This trend is driven by the desire for convenience and the ability to shop for all grocery needs online.

Increased Focus on Logistics and Delivery

Online grocery platforms like Alibaba's Ele.me and JD.com's JD Logistics are investing heavily in express home delivery services to ensure timely delivery of products. For example, Alibaba's Ele.me offers same-day delivery for orders placed before 11 AM, while JD.com's JD Logistics has developed a network of fulfilment centres and delivery hubs to enable fast and reliable delivery. This trend is driven by the expectation of fast delivery among Chinese consumers.

China Online Grocery Market Trends

The market is also being driven by the higher penetration of internet and smartphones. Smartphones have become prominent devices through which Chinese consumers not only research but also purchase edible goods. Online grocery retailers often offer exclusive discount and promotions on purchases made through mobile phones, thus, making mobile applications a significant retail channel in China. The rise in the online payment applications and the shift towards going cashless is aiding the China online grocery market development.

The high population density in the urban areas of China, where the millennial consumers are willing to experiment with new platforms and try out international brands is driving the China online grocery industry growth. As the industry is focusing more on maintaining its customer base in tier 1 cities, the major players are also looking to expand to tier 2 and 3 cities and towns. The rising middle class with higher disposable incomes and more spending power is driving the online grocery market in China.

The industry is being propelled forward by the rise in infrastructural support for e-commerce ventures and continuous improvement in the logistics technology, such as adoption of electric delivery fleet. Moreover, the attractive prices and offers provided by the platforms, such as discounts, cashback offers, flexible return policy and exclusive subscription offers, like low delivery charges, are ensuring customer retention along with attracting new customers, which is providing further impetus to the market development.

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China Online Grocery Industry Segmentation

The EMR’s report titled “China Online Grocery Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type of Category

• Grocery and Staples

• Fruits and Vegetables

• Others

Market Breakup by Platform

• Website

• Mobile Application

Market Breakup by Payment Method

• Online

• Cash on Delivery

Market Breakup by Region

• Shanghai

• Zhejiang

• Guangdong

• Jiangsu

• Beijing

• Others

China Online Grocery Market Share

Web-based and app-based platforms are popular as they offer convenience, wide product selection, and the ability to leverage digital payment methods

The online grocery market in China includes web-based platforms, which are websites or online portals of supermarkets and local grocery stores that allow consumers to order groceries online. For example, Alibaba's Tmall Supermarket and JD.com's JD Super are two prominent web-based online grocery platforms in China. These web-based platforms provide customers with the convenience of shopping for a wide range of grocery items, including packaged foods, fresh produce, beverages, and household products, from the comfort of their homes or offices.

In addition to web-based platforms, the market is also driven by app-based platforms. These are mobile applications developed by supermarkets, grocery stores, and e-commerce companies that enable consumers to purchase groceries using their smartphones or tablets. For instance, Meituan, a leading on-demand delivery platform in China, has a dedicated grocery delivery app that allows users to order a variety of fresh and packaged food items. The rise in smartphone penetration and the growing preference for mobile shopping have contributed to the increasing adoption of app-based online grocery platforms in China.

Online payment methods hold a significant market share due to rising popularity of digital wallets and security offered by online payments

Online payment methods dominate the China online grocery market share, with digital wallets like WeChat Pay and Alipay being the most popular options. These digital wallets are widely used by Chinese consumers, accounting for more than 90% of the mobile payments market. For example, when shopping on Alibaba's Tmall Supermarket or JD.com's JD Super, customers can easily make payments using their preferred digital wallet, ensuring a seamless and secure transaction process. The convenience and security offered by online payment methods have contributed to their widespread adoption, making them the preferred choice for online grocery purchases in China.

As per China online grocery market analysis, cash on delivery is another significant payment option in the market. This method allows customers to pay for their groceries upon delivery, providing a sense of security and trust for those who prefer not to make online payments. For instance, Meituan's grocery delivery service allows customers to choose cash on delivery as a payment option, catering to those who prefer traditional payment methods or have concerns about online transactions. Cash on delivery remains a popular choice for some consumers in China, offering a convenient and familiar way to complete their online grocery purchases.

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Leading Companies in the China Online Grocery Market

Market players are improving the shopping experience and leveraging technology to enhance customer engagement, with a focus on omni-channel retailing and the integration of online and offline channels

Alibaba Group Holding Ltd, founded in 1999, is headquartered in Hangzhou, China. The company is a global leader in e-commerce, operating platforms such as Taobao and Tmall. In addition to e-commerce, Alibaba offers cloud computing services, digital media and entertainment, and logistics solutions.

JD.com Inc., established in 1998 and based in Beijing, China, is a prominent e-commerce company known for its online retail platform. JD.com offers a wide range of products and services to consumers, including electronics, fashion, home goods, and more. The company also provides logistics services, cloud computing solutions, and other technology-related services.

Meituan, founded in 2010 and headquartered in Beijing, China, is a leading provider of on-demand delivery services, hotel and travel booking, restaurant reviews and reservations, and various other local services. Company’s focus on local services has made it a key player in China's tech and service industry.

Amazon.com Inc., with its establishment in 1994 and headquarters in Washington, United States has become a global giant in e-commerce. Amazon's marketplace offers electronics to household goods, and its Prime membership includes benefits like fast shipping. Beyond e-commerce, Amazon is a major player in cloud computing with Amazon Web Services (AWS).

Another key player in the China online grocery market report includes Miss Fresh, among others.

China Online Grocery Market Analysis by Region

Shangai and Beijing have a robust e-commerce sector, which facilitates market growth

Shanghai is a major hub for online grocery in China. Platforms like Alibaba's Tmall Supermarket and JD.com's JD Super are catering to the rising demand for convenient grocery shopping. Shanghai's online grocery market is expected to continue its positive trajectory due to the city's high population density and tech-savvy consumers.

As the capital city of China, Beijing is a significant player in the country's online grocery market. Major players like Alibaba and JD.com have a strong presence in Beijing, leveraging the city's high purchasing power. Furthermore, Zhejiang, the home province of Alibaba, has a strong e-commerce and retail presence, which has translated into growth for the online grocery market. Platforms like Taobao and Tmall, both owned by Alibaba, have a significant foothold in Zhejiang's online grocery sector.

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China Online Grocery Market Report Snapshots

China Online Grocery Market Size

China Online Grocery Market Growth

China Online Grocery Market Trends

China Online Grocery Market Share

China Online Grocery Companies

China Online Grocery Market Regional Analysis

*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.