Navigating Change: How Grocery Retail is Evolving Across Asia
PLUS: Former Brex CRO building something new
Behind The Scenes
Consumers across markets continue to face significant challenges due to inflation, which has risen above 6% in Asia since early 2022. This inflationary pressure has driven spending growth in FMCG, yet it has had minimal impact on profitability for grocery retailers and FMCG companies as rising costs erode margins.
To understand these dynamics, our analysis focused on eight markets, examining three key areas. First, we explored shifts in overall FMCG spending, including changes in basket size and purchase frequency. Second, we assessed how consumer purchasing behaviors have evolved across product categories, sales channels, and store formats. Lastly, we evaluated the impact of these shifts on the margins of grocery retailers, e-tailers, and FMCG companies. These insights aim to help leaders in the sector tailor strategies to meet evolving consumer demands.
Asia’s FMCG landscape is shaped by its diversity in spending power, urbanization, and digital adoption. GDP per capita varies widely, ranging from $2,000 to $33,000, while urbanization levels span from 37% to 85%, with significant differences in digital penetration. Despite these disparities, common trends have emerged across the region.
Markets such as Indonesia, Malaysia, South Korea, and Taiwan have experienced slowing FMCG growth, while India, the Philippines, and Vietnam are seeing robust spending increases. Meanwhile, Thailand has seen a decline in FMCG spending, with inflation prompting consumers to shift toward value-oriented shopping and modern grocery formats. These trends highlight the need for localized, market-specific strategies to navigate the challenges and opportunities in Asia’s diverse FMCG sector.
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Rick is the CEO of Illumination International, a family office based between the US and Asia. He is a seasoned investor specializing in distressed consumer assets, with an impressive track record of managing a diversified portfolio of over six businesses. His expertise extends into the real estate sector, where he has successfully developed and constructed multi-family residential complexes in the Midwest. Rick is also recognized for his strategic procurement abilities and commodity specialization, further enhanced by his high-level political connections.