Pivot to e-commerce to increase online food and beverage sales by 30%

According to a report, the Philippines’ growing preference for e-commerce for their food supply needs will lead to a 30% increase in sales of food and beverages sold online this year to a record $ 280 million.

A report by the Global Agricultural Information Network (Gain) predicted that e-commerce food and beverage sales this year would increase by $ 64 million from $ 216 million last year.

The Gain report pointed out that “major market share shifts” in the nation’s food and beverage retail sector continue to “grow and solidify” in the wake of the Covid pandemic. 19.

The Gain report was prepared by the United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS Manila)

One of the main changes seen in the domestic industry is the rise of e-commerce, as “companies are increasingly exploiting sales through online services offered from websites and mobile applications,” according to The report.

“While consumers initially turned to e-commerce for continued access to products and as a security measure against Covid-19, it is likely to remain an increasingly preferred option after the pandemic,” the report said.

“Although still only a tiny fraction of the market, food and beverage e-commerce grew 210% last year, and Post [USDA-FAS Manila] estimates growth of 30% in 2021, ”adds the report.

Citing data from Euromonitor International, USDA-FAS Manila said food and beverage e-commerce in the Philippines more than tripled to $ 216 million last year, from $ 70 million in 2019. .

The report noted that some of the websites and mobile apps Filipinos use to buy their food supply online are Lazada, Shopee, GrabMart, and Metromart as well as community groups in Viber, Facebook Messenger, and Telegram.

Another major market shift in the domestic food and beverage industry highlighted by USDA-FAS Manila is the growing Filipino preference for hypermarkets, convenience stores, warehouse clubs and supermarkets over traditional retailers, which are mainly sari-sari stores, due to stable supply, security and convenience.

“Specifically, FAS Manila is seeing hypermarkets, convenience stores, warehouse clubs and supermarkets all growing at double-digit rates and more than offsetting the expected further declines in traditional retail,” he said. .

The Gain report explained that mainstream retailers “have struggled mightily under Covid-19” due to supply chain issues and reduced foot traffic. Worse, Filipino consumers have changed their habits.

“Traditional retailers have historically offered an advantage by covering both cities and remote areas, although consumer habits have shifted away from them in favor of options offering more reliable supply, security and convenience,” he added.

The Gain report said Filipino consumers “continue to stock their pantries to avoid frequent visits for groceries as concerns about supply shortages in certain products persist.”

The Gain report added that food and beverage retailers “increasingly offer premium selections to meet consumer demand” as Filipino consumers continue to avoid and / or be prevented from profiting. food services such as dinner on site.

The Gain Report also noted that home cooking and baking remain popular during the Covid-19 pandemic. The Gain report adds that modern retailers continue to expand into new regions, cities and provinces while offering extended delivery services, personal shoppers as well as offering more payment channels, which are mostly online.

“Meanwhile, some retailers, especially convenience stores located near offices and schools, continued to experience declining sales due to ongoing Covid-19 restrictions,” he said. .

Overall, USDA-FAS Manila forecast total food and beverage retail sales this year to rise 10% to $ 28.6 billion from $ 26 billion last year.

“With the difficult situation in the restaurant industry, retail sales are expected to remain strong,” he said.

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