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Asian C-stores see e-commerce options

News, 09 December 2015

SINGAPORE: Convenience stores across Asia are well-placed to cater to the requirements of growing urban populations who are digitally connected, according to researcher Nielsen.

Peter Gale, managing director, Retailer Services Asia Pacific at Nielsen, pointed out similarities between convenience and e-commerce. Both are growing quickly and both "deliver against the same fundamental premise – convenience – albeit in different ways".

But he added that groceries are a slow-growing e-commerce category, partly because of difficulties in monitoring product quality, and partly because people want near-instant delivery.

"As a result, there is a best-of-both-worlds opportunity for convenience players to partner with e-commerce players to provide the opportunity for a quality check and fast pick-up to those who wish to order groceries online," he said.

Asian consumers are already heavily reliant on the convenience channel, Gale suggested, running through a typical "day in the life" where an office worker stops off at her local 7-Eleven for breakfast, lunches at a small store in her office building and grabs an afternoon coffee from a nearby Family Mart.

On her way home she stops to pick up a pre-cooked meal at Tesco Express, where she also pays bills and picks up movie tickets for later that night. Returning from the cinema she stops in at 7-Eleven again for a hot chocolate and a snack.

"It's not too much to say that what was once merely a store-front is becoming part of many people's way of life," he said.

Urban consumers have less space and less time, meaning that demand for fresh, high-quality food and convenient time-saving offerings is growing.

The spread of mobile technology also means that more people in smaller towns and cities are exhibiting the same demand for quick solutions, and Gale argued that convenience stores are ideally placed "to provide an easily accessible, profitable click-and-collect offering".

Convenience stores already account for up to a quarter of FMCG sales in Taiwan, Korea and Thailand and are "just scratching the surface" in Vietnam and the Philippines, where urbanisation and growing household mean "the convenience proposition will become relevant to a broader population base", said Gale.

Data sourced from Inside Retail Asia; additional content by Warc staff