Tesco, foreign grocers leaving Asia as competition with e-commerce, local rivals intensifies
- Tesco latest foreign grocery retailer to pull back from Asia, following Carrefour, Metro and Dia
- E-commerce rivals have taken as much as 40 per cent of grocery sales in China in recent years, according to Oliver Wyman’s Jacques Penhirin
Foreign grocers continue to retreat from China and Asia as they face increasing competition from e-commerce companies, struggle to adapt to local tastes and find it difficult to differentiate themselves without local partners, according to analysts and industry experts.
“Local retailers have been rapidly growing over the past five to 10 years, rolling out more stores and multi-format networks that are highly tailored to the locations they serve,” Nick Miles, head of Asia-Pacific at IGD, an industry research group, said. “These retailers tend to have a stronger understanding of shopper preferences across markets and regions. The major markets in the region all have a different leading retailer, therefore geographical focus tends to give an advantage over companies who spread their operations too thinly.”
The Tesco sale comes as Asia is expected to account for nearly half of all grocery retail sales between now and 2024, when global sales are expected to exceed US$8.3 trillion, according to IGD. China is expected to be the world’s largest grocery retail market with nearly US$1.9 trillion in sales in 2024.