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The Importance of Networking in Asia Food Industry

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NUR AIN SYAHIRAH BTE NOR ZAIDI

2016649482

HM 242 5A

THE IMPORTANCE OF NETWORKING IN ASIA FOOD INDUSTRY

Nowhere has the explosion of e-commerce been as dramatic as in Asia. In recent years, Asia has become the strongest B2C e-commerce region, compared to North America and Europe. Food and grocery segment are becoming increasingly attractive as e-commerce continues to develop across the region. In Australia, Japan and South Korea, while some categories such as clothing, media and entertainment, and IT traditionally dominate e-commerce, food is now gaining importance in the e-commerce space, ahead of consumer and household electronics, sports and recreation and others. In China, it is bigger than the toys category and in Indonesia, it is also bigger than health and beauty.

Recent surveys reveal a significant growth in the number of shoppers buying food products online in Asia, with a quarter (26%) shopping online for groceries in the last month versus a fifth (22%) in 2010.  The first three of the top 10 online grocery markets in the world are in Asia, which is China is leading with the first followed by Japan at the third and South Korea at the sixth. The Chinese online grocery market, already the world’s largest, is set to be worth almost US$180 billion by 2020, with a 32% year-on-year growth. Consumers are enabled to purchase a supermarket’s entire range of products without leaving their seat is the simple factor for this growth prior to the transformative of technologies. Logistics networks improvement that enables faster and more efficient purchases and deliveries will lead to a change in consumer behaviour, especially as more people begin to rely on e-commerce for their grocery purchases.

The development of e-commerce has been the emergence of the 21st Century, allowing businesses to gain easier access to markets and target audiences. The importance of quality control and having a precise regulatory framework in place is essential to protect the consumer's interest, especially when it comes to food and consumables meanwhile the upscaled convenience and accessibility have obviously been a privilege to businesses and consumers alike. Each country’s regulatory boards and individual F&B manufacturers can learn from various best practices from around the region, adapting them to suit the ideal needs for their varying markets in fact of different markets in Asia have different market scales.

According to FIA’s Head of Science and Regulatory, while the e-commerce market is still in its infancy stage, it’s growing very fast and Asia online grocery channel is set to grow by 2020. There is a driving ecosystem change in society. People nowadays are relying on online services such as e-commerce, ride-hailing and on-demand video. Almost all the society nowadays spent about eight to ten hours a day online, and it has become a massive part of what they do on a daily basis. Behind this rapid growth of online grocery shopping in Asia, there are four trends that need to be the highlight. The first one is societal changes and the rise of a time-pressed middle class, the transformative technology followed by enhanced e-commerce infrastructure and the improvement of logistics that enable faster and more efficient purchases and deliveries.

As for the societal changes, the rise of the middle-class and the increasing number of single and small households in South Korea and China. Time-pressed shoppers tend to seek different product assortments and more convenience. The transformative technology which is artificial intelligence, enables personalised product recommendations, automation and robotics. For the e-commerce infrastructure the increased number of internet and mobile penetration, as well as digital payment solutions. Last but not least, the improvements in logistics like a faster delivery such as using stores to deliver and in less developed countries, making online shopping accessible.

Basically, e-commerce gives a big impact on how consumers shop for snack food. As for example, in China, more than 10% of snack food purchases are now made by consumers online and many other Asian markets are not far behind. There has been an explicit focus on winning in e-commerce. A dedicated team of specialists across key Asian markets who partner with eTailers and eMarketplaces, as well as manage Direct to Consumer storefronts was established. The products also were redefined in assortment in a way that is efficient for the e-commerce environment such as larger packs, differentiated flavours and unique gifting formats. A larger portion of advertising spend on investment in Digital and eCommerce media were shifted, and these bets are starting to pay off. The eCommerce sales are growing in high double digits as a result and a large, thriving eCommerce portfolio in China, India, Australia and key South East Asian markets were obtained.

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