China and India predicted for grocery growth

By Aidan Fortune

- Last updated on GMT

China will see a drop in pork production this year, according to Rabobank
China will see a drop in pork production this year, according to Rabobank

Related tags: Grocery store, China

The Chinese grocery market is set to grow 33% between now and 2020.

Food and consumer goods research firm IGD forecasts that China will retain its position as the largest grocery market over the next five years.

The growth is predicted to come from the small to medium-sized cities, labelled tier three and four, which are growing in population.

Joanne Denney-Finch, IGD chief executive, said: “China will maintain its position as the world’s biggest grocery market for the foreseeable future. Although the Chinese growth rate is slowing, it’s still very impressive, particularly in ‘tier three and four cities’.

Western brands

​These are regional, medium-income cities, undergoing rapid development. There are many more opportunities for retailers and Western brands. For example, online grocery will enjoy explosive growth in China, though from a modest base, tripling in size between now and 2020. This will be powered by more Chinese having access to the internet through smartphones and other devices.”

Despite this predicted growth, pork production in China is predicted to decrease this year, presenting an opportunity for pork producers to take advantage of a growing market and a shrinking supply. According to Rabobank’s recent ‘China’s Incredible Shrinking Hog Herd’ ​report, Chinese pork production is forecast to drop by 3.7 million tonnes (6.5%), to 53m tonnes in 2015.

IGD also predicts that the grocery sector in India will grow by 79% over the next five years, growing from US$503bn to US$901bn by 2020.

2020 Vision

Mexico: Market expected to grow by 39%

Indonesia: Expected to grow by 63%

Nigeria: 85% growth predicted over the next five years

Turkey: 61% market growth estimated

MINT opportunities

Denney-Finch believes MINT countries (Mexico, Indonesia, Nigeria and Turkey) could become key export markets if they improve their infrastructure. According to the IGD research, Nigeria’s grocery market will increase in value by 85% to reach US$300bn by 2020.

Although growth prospects appear limited in Europe at the moment, this is a time of tremendous opportunity for grocery companies further afield. The vast majority of global grocery growth will come from Asia, Africa and the Middle East, supported by increasing affluence, urbanisation and rising populations. With many European products and brands highly regarded in these regions, this will be a boom time for companies with export skills.​    

“Nigeria is the fastest-growing of all large-scale grocery markets with a rapidly expanding economy, population and middle class. It does, however, face significant challenges such as the need to improve security and limited infrastructure in some regions. 

“The other ‘MINT’ markets will also expand rapidly. Indonesia, in particular, benefits from a fast-growing and youthful population and there is a lot of focus on convenience stores to make the most of how this group shops.”

Top 15 global grocery markets

Rank

Country

2020

US$bn

2015

US$bn

% Change in value

2015 - 2020

1

China

1,491

1,119

33

2

USA

1,305

1,078

21

3

India

901

503

79

4

Russia

557

380

47

5

Brazil

547

389

41

6

Japan

485

457

6

7

UK

352

310

14

8

Indonesia

351

215

63

9

Mexico

341

245

39

10

Germany

340

304

12

11

France

310

282

10

12

Nigeria

306

165

85

13

Turkey

271

168

61

14

Italy

239

221

8

15

Philippines

160

100

60

(Source: IGD)

Related topics: China, Industry & Markets, Pork

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