Frozen food and e-commerce emerge as Asia’s COVID-19 retail winners

Frozen food and e-commerce channels have been two of the food industry success stories to emerge from the COVID-19 pandemic and nation-wide lockdowns that triggered significant shifts in shoppers’ behaviour in Asian markets.

This is according to data from a global YouGov report, International FMCG/CPG Report 2021: Consumer goods in a crisis. The report analysed 17 markets globally and questioned over 4,000 consumers from four across Asian markets – India, China, Hong Kong, and Indonesia.

Out of all global regions, frozen food has seen the biggest jump in popularity in Asia-Pacific, with demand particularly strong in Hong Kong, where nearly three in five say they are buying more (58%) and just 3% say they are buying less frozen vegetables.

“In fact, APAC markets account for the top two ‘increasers’ on a global scale: Hong Kong (58%), Singapore (40%), and even at the lower end tend to hover around the global average (Australia 29%),” reads the report. “However, India is an outlier: a greater proportion of consumers have decreased their consumption of frozen foods than in any other market featured in our study (38%).”

Demand for kitchen cupboard staples, such as dry pasta, rice, spreads and tinned vegetables, rose by 30% in all markets around the world but this rose to almost half (49%) in Hong Kong while Singapore saw a rise in demand for fresh fruit and vegetables with around half of all grocery shoppers saying they increased their intake.

“The pandemic hasn't had a one-size-fits-all impact on shopping behaviour in the FMCG/CPG sector, said Chris Todd, vice president of new business sales at YouGov. “There are very real differences between different markets and it will be interesting to track how these behaviours continue to change - or whether they are more reflexive and we eventually return to the way things were.”

Shopping locally

YouGov’s APAC-specific data shows that Asian consumers are broadly more likely to use convenience stores for groceries and household essentials than supermarkets compared to shoppers in most other markets. In Indonesia (54%), Hong Kong (48%), China (44%), Singapore (37%) and India (35%), people shop in convenience stores and corner shops in “significantly higher proportions” elsewhere in the world, write the analysts.

Indonesia and India also came top for buying from local businesses with 77% of consumers stating their intentions to make local purchases. However, consumers in other Asian countries showed some of the lowest global levels of demand for locally produced goods, with less than half of consumers in Hong Kong (49%) and just 54% of Singaporeans.

Despite the massive challenges that the COVID-19 pandemic has presented for local retailers, there are some silver linings, the YouGov analysts write.

“[…] local businesses can probably take heart from the fact that most people intend to support them once the COVID-19 pandemic subsides. Alongside their good intentions in this area, most consumers also plan to adopt a more sustainable approach to their buying habits in future (54%). Of course, there can be a wide gap between people’s stated values and their eventual actions. In 2022 we will see how successful these efforts to buy greener, more local products have been – assuming the pandemic is over by then.”

E-commerce preferences

Consumers Asian-Pacific countries also came top globally for interest in and intent to use online shopping and delivery services. YouGov data shows the three most populous countries in Asia, India, China and Indonesia, have a high proportion of consumers - 67%, 64% and 63% respectively - who want to use online shopping and delivery more.

Even in Asian countries where interest in e-commerce was lower, the figures were still over half: notably, 53% of Singapore citizens and 53% of Hong Kong citizens.

Finally, the report reveals national differences regarding specific e-commerce preferences. While French people have a greater preference for click-and-collect than for direct-to-the-home delivery (18% versus 13%), 40% of Singaporeans want groceries delivered to their doorstep while just 6% are willing to collect it themselves - a marked 34-percentage point difference, the analysts note.

“There are straightforward drivers of this. Not only is having groceries delivered more convenient than picking them up – even taking into account delivery fees – but with many areas under stay-at-home orders, some consumers had a powerful disincentive to leave the house for anything but the most important reasons,” write the analysts.

“In markets such as Singapore, for example, population density makes driving (and therefore click and collect) less attractive; in markets where the population is less dense, the reverse may be true.”