Online shopping for groceries and FMCG in Thailand has spiked during the COVID-19 pandemic and i-dac Bangkok’s Suchada Supakan shares research that can help advertisers understand consumers better and shape the right marketing strategy.
Online grocery shopping probably isn’t the new news in many markets, yet in the past year, it has become mainstream for urban Thais ranging from Gen Z to Gen X, with a sharp 74.3% increase in online purchases of food and personal care products.
Although shopping in-store for grocery and household products has been a part of Thai life for years, as seen in the continuous expansion of modern-trade stores across the country, things suddenly changed due to the restrictions brought on by COVID-19, with the rapid digital adoption by the Thai people creating positive momentum for FMCG brands to gather traction although amid aggressive competition.
As a result, the pandemic has led to more brands elevating their digital marketing, said i-dac General Manager Kyosuke Matsui.
He explained: “They know that 'digital' is the strongest touchpoint to engage with their customers and sell their products. But this doesn't mean changing the way you post on your social media but relooking your promotions, CRM, packages and even the product.”
For advertisers hoping to shape the right marketing strategy, i-dac’s research provides a better understanding of shoppers.
Onset of online shopping
Much has changed since the outbreak hit in March 2020, with a 30% increase in new digital-service consumers showing how quickly Thais have adopted digital technology to become even more e-commerce savvy.
Our study showed that they have transformed from just online shoppers to frequent online grocery shoppers, as evident from the 78% increase in groceries and FMCG shopping due to pandemic restrictions.
Frequency of online grocery shopping
- 50% shop online more frequently, according to a June 2021 i-dac survey
- 78% shop more groceries and FMCG online, according to Hootsuite’s January 2021 report
Soaring e-marketplace and delivery apps
- 87% are e-marketplace shoppers, says a June 2021 i-dac survey
- 67% are delivery app shoppers, based on a June 2021 i-dac survey
Online grocery shopping goes mainstream
- 77% of online grocery and FMCG shoppers are aged 16-44, according to a GWI report in Q1 2021
- 52% shopped for groceries and FMCG online in the past week, according to a GWI report in Q1 2021
What it means for brands
While the in-store business of grocery brands will continue to be part of Thai grocery shopping culture, FMCG brands and grocery brands need to respond to and catch up with the transformation of their digitally evolving consumers as grocery e-commerce becomes prevalent going forward.
Mobile apps for grocery/FMCG shopping
Mobile apps play an essential role to engage the modern generation in online grocery shopping, particularly with the “already-used multi-tasking” apps, such as Grab and Line Man. An i-dac survey conducted in June this year found that:
- 70% use grocery brand app
- 59% use third-party delivery application
- 39% use grocery brand website
But while mobile e-commerce apps are generally the sweet spot when selling groceries and FMCG, the popular Line OA is not one of them. When shopping for groceries & FMCG, 56% enjoy using a third-party delivery app, while 52% like using the grocery brand app, and 40% feel “just alright” using brand grocery website.
By comparison, 39% have never shopped for groceries on Line OA.
Familiar delivery apps are grocery-shopping favourites
- 63% love Grab Mart
- 37% enjoy Line Convenience
- 78% shopped on 7-Eleven delivery app
- 63% love and like 7-Eleven delivery app
The accessibility of mobile groceries has also revealed another trait among Thai consumers – they tend be “frequent, small basket size” shoppers (46%) rather than “planned” grocery and FMCG shoppers (38%). The majority spends only THB100-500 each time for grocery shopping (67%).
And because Thais are convenience-driven consumers, providing convenience and seamless delivery to address the daily needs of these customers is imperative for both grocery and FMCG brands as they embark on their mobile grocery e-commerce shopping journey.
- 94% want doorstep delivery
- 64% want to save time walking down each aisle
- 40% love to plan ahead
What it means for brands
In response to this demand, some key players such as Walls, Nestle ice cream, Oriental Princess and Beauty Buffet have embedded their online stores into third-party delivery apps to provide “order-to-pick-up” service. While these online stores are not widely known yet, we observed strong purchase intent if consumers see the stores and especially when they already have the brand in their mind.
A brand-owned store embedded in a popular delivery app will allow brands to connect with customers who already know them well.
Balancing online and offline presence is important for building a lasting relationship between a brand and its consumers. To that end, in-store and online data, including first party and third-party data, can be harnessed to personalise customer experience and advertising in order to facilitate the shopper journey.
At the same time, brick-and-mortar marketing cannot be ignored as Thais still love to touch and feel before buying, even as demand for a “freshly handpicked” delivery service is emerging among the younger generation. This means apps have to be at the forefront of grocery and FMCG e-commerce in order to deliver instant quality and service.
It also means that offline and digital media are required to work together to connect with consumers at every stage of their shopping journey.
For targeting mainstream shoppers, TV is still essential to drive massive awareness for grocery brands, while POP media works as a trigger for instant purchases. This makes digital advertising very important in the world of instant grocery shopping, especially during life under COVID-19 restrictions.
This article is part of an on-going series with i-dac Bangkok based on their monthly i-dac Digital Flash series, featuring insights into trends in Thailand.
The series is led by the Digital Strategic Planning unit:
- Suchada Supakan, Head of Digital Strategic Planning
- Natthaporn Loetsakulcharoen, Senior Manager of Digital Strategic Planning
- Laddawan Thanlap, Senior Digital Strategic Planner
i-dac Bangkok is a digital agency specializing in performance media, branded content, and data marketing.