Singapore: online to become second biggest modern channel by 2022

Date : 18 March 2021

COVID-19 has been a major catalyst for Singapore’s grocery market growth in 2020. As many Singaporeans worked from home and cooked more, the market grew four times faster than a typical year. 

Since December 2020, more Singaporeans are allowed to work in offices. Demand for groceries is forecast to come off its peak and taper back to more normal levels over the next year. It is expected to have a negative growth rate over the next two years, with a forecast CAGR of -1.5% from 2020 to 2022 - a result of cycling some tough comparative trading periods in 2021/22.

Online will see the biggest market share increase of all channels

We expect online to continue to grow into 2022. The increased capacity at key retailers and shoppers’ familiarity with the channel will maintain its growth. Alibaba Group and FairPrice Online are increasing their capacity and making strategic investments to develop the channel over the long term. Market share will increase from 6.5% in 2020 to 8.8% in 2022. New players like Foodpanda and Grab are also helping shoppers embrace the channel.

Supermarket to lose some of the gains made in 2020

As more people return to their workplaces and start eating out more, supermarket as a channel will lose some of its value over the next year. However, it will continue to be the dominant channel. We forecast its market share to decline from 61.0% to 56.4% by 2022. Hypermarkets will maintain 6.3% market share – retailers’ efforts to revitalise the stores with more relevant propositions will support their role in the market.

Convenience channel to grow at CAGR 3.5%

Convenience is expected to grow to 8% of the market. Retailers are responding quickly to changing behaviour to transform their convenience strategy. Better product mixes, more services and promotions will drive footfall back to stores.

Traditional trade on a declining trend over longer term

Traditional will grow market share from 18% in 2020 to 19.8% on 2022, regaining some of the value lost in 2020. While the channel will grow slightly in the next two years, its longer term trend is still in decline.

IGD Retail Analysis subscribers can find details in this 28-page report with this link.

It covers:

  • Two year forecasts for the grocery market in Singapore
  • Estimates on the split between modern and traditional trade in Singapore
  • Information on Singapore’s leading retailers by both sales and network size
  • Two year forecasts for FairPrice, Dairy Farm, Sheng Siong and Alibaba Group in Singapore
  • Forecast growth rates for the hypermarkets, supermarkets, convenience and online grocery channels in Singapore
  • Downloadable data and graphs in an excel spreadsheet