E-food Online sales of products may exceed 1 trillion rubles by 2024

Food is becoming the fastest growing category in the e-commerce market. According to Infoline forecasts, this year online food sales will reach 400 billion rubles, and by 2024 they will exceed 1.1 trillion rubles, of which almost 90% will be provided by the ten largest players. But without expanding the range, geography and launching the delivery of alcohol, it will be difficult to achieve indicators.

According to the results of January-June, online food sales in Russia exceeded 150 billion rubles, which is 2.5 times higher than the same level last year. Such calculations were provided in Infoline. According to analysts, by the end of the year, the market turnover will reach 400 billion rubles, and by 2024 - 1.1 trillion rubles. Food products will become a key growth driver for the entire online market, as a result of which their share will increase from 5.3% to 18.8%, Infoline expects.

According to analysts, the COVID-19 pandemic has been a catalyst for the development of online food retail in 2020, with increased consumer confidence as one of the key results.

Consumers have formed a habit of ordering products online, especially among residents of large cities, according to an Infoline survey. According to analysts, over the past year, the audience of active online shoppers has grown by more than 40% and exceeded 60 million people. Infoline CEO Ivan Fedyakov adds that the companies themselves continue to actively invest in development and expansion into regions, some of which show results comparable to Moscow. In addition, rising inflation allows food manufacturers to offset rising costs and increase supplies, he adds.

According to Infoline data, the ten largest operators continue to consolidate the market: today they account for about 87% of all orders against 80% a year earlier.

According to the results of the first half of the year, X5 Group remained the largest player in the segment (includes the Perekrestok. Vprok online hypermarket and express delivery services). The total online turnover of X5 increased by 64.4%, to RUB 23.6 billion, year-on-year. The second place was taken by Sbermarket with 21.7 billion rubles, the third - by Vkusvill with 21.2 billion rubles. Year on year, their figures increased by 233% and 437%, respectively. Sales of "Scooter" for this period increased by 419%, to 15.9 billion rubles, "Yandex.Lavka" - by 244%, to 11.7 billion rubles, calculated in Infoline. According to analysts, the majority of companies have an increase in the number of orders with a decrease in the average check, which is explained by an increase in the frequency of purchases and the development of express delivery.

According to Ivan Fedyakov, the level of market consolidation may already be the limit and the emergence of new major players should not be expected. “To do this, you need to show very high turnover and work with little profitability,” he explains.

Food and fast-moving consumer goods (FMCG) have indeed been the engines of e-commerce growth over the past year, Yandex confirms. So, in the second quarter of 2021, FMCG in the company's e-commerce business took the largest share of 39%, which is higher than the share of electronics (33%), they note there. According to a Yandex representative, the great potential of the online food retail market is due to the fact that online penetration in this category is still at the level of 2%, and this segment itself is many times larger in volume than the same catering market, where online accounts already 10–15%.

While food categories are showing triple-digit growth in online sales, in order to predict the development of the channel in the medium term, it is important to take into account the accompanying factors associated with the economy of this business, which remains unprofitable, says Alexander Shurkaev, head of e-commerce at NielsenIQ Russia .

According to him, the experience of other countries shows that it will be very difficult for online retailers in Russia to achieve double-digit market share in the next two years.

Russians began to go to supermarkets more often 

In the UK, the share of the online FMCG market was fixed at 12%, in France - by 10%, in Spain - by 3%, in Germany - by 1%, even against the backdrop of "phenomenal" results in 2020, Mr. Shurkaev continues. According to the expert, the regional expansion of services, the development of the assortment, including in the fresh category, and the launch of alcohol delivery can push the further development of online commerce. Igor Rozhkov, Marketing Director of Samokat, agrees that delivery services are in unequal conditions with traditional retail chains in terms of the available assortment.