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It's interesting to think about the psychology behind this FT chart outlining consumer spending in the United Kingdom from March to early July. You can see the initial panic buying of groceries in late March (well, food and toilet paper). And you can more or less see the moment where people suddenly realized -- after working at home for a few weeks -- that their home was in desperate need of a refresh and that planting tomatoes might be a good hobby to take up given that there isn't much else to do. In case any of you are wondering, I remain well-stocked on the toilet paper front and my tomatoes are doing just fine.
Image: Financial Times
The World Economic Forum recently posted the below chart showing that 1/5 of all grocery purchases in South Korea are done online. The calculation is e-commerce revenue as a percentage of total fast moving consumer goods revenue in the country.
The explanation they give for this high percentage is that South Korea has some of the fastest and most ubiquitous internet access in the world.
Today it was announced that Amazon is planning to launch its “Prime Now” service in Vancouver and Toronto this November and January, respectively.
The pilot program will offer two-hour deliveries for members and, according to the Wall Street Journal, will be be heavily focused on groceries.
It’s worth noting that most of Whole Foods’ stores in Canada (now owned by Amazon) are in and around Vancouver and Toronto. And that Amazon has already started lowering prices to make those stores more competitive.
Right now a “Prime” membership in Canada costs CAD$79 per year. I’m not sure if the price will change at all for “Prime Now”, but let’s assume for the sake of argument that it won’t.
If this service was available to you today (or if you’re in a city that currently has it), would you (do you) use it? I would love to hear your thoughts in the comment section below.
Two common objections around online grocery shopping are that many people want to touch and feel the goods before they buy and that perishable deliveries are a challenging thing to coordinate.
I think I can work around those objections and would certainly try this today if it was available in Toronto. What about you?
But as soon as I read this I thought to myself: This can’t be the only reason. When was the last time you really wanted to order groceries online but your internet connection was too slow?
Also, if you look at all online shopping (not just FMCG), South Korea no longer shows up as such an outlier. So what’s happening with grocery?
Without actually knowing the market, I would imagine that there are companies in South Korea who have simply figured out how to offer a great online grocery shopping experience.
South Korea is also one of the denser countries in the world at about 513 people per km2. That would help with distribution.
But then again, the Netherlands is also quite dense (414 people per km2). Why are they only at 2.6%? (For comparison, the US is about 33 people per km2.)
If any of you are familiar with the South Korea market I would love to hear from you in the comments. If they really are at 20%, I am surprised more people aren’t talking about this.
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