Online shopping trend set to stay after curbs ease
Groceries and food, together with indoor exercise equipment and gaming tools, have emerged as the most popular categories for online shopping, as people adapted to the strict social distancing measures during the circuit breaker period.
Analysts and companies also observed that e-commerce received a huge boost from this crisis, with consumers turning to online platforms to make their purchases.
And the uptrend in online shopping is set to continue even after countries relax restrictions, with experts predicting that e-commerce will play an even larger role in the “new normal” than ever before.
Online sales made up 8.5 per cent of total retail takings in March, according to the Singapore Department of Statistics, an increase from 5.8 per cent in January and 7.4 per cent in February. This does not capture all online purchases, especially those made from overseas retailers.
Maybank Kim Eng economist Lee Ju Ye said: “Consumers are increasingly shifting to online platforms, especially for purchase of groceries, food delivery, and also for non-essential items such as computer and telecommunications equipment and furniture – most likely due to work-from-home policies fuelling demand for office-related equipment and ergonomic chairs.”
Ms Esther Ho, director of the school of business management at Nanyang Polytechnic, said there appeared to be a sharp spike in online sales of groceries and fresh food.
This was especially because food and beverage establishments had to stop dine-in customers and allow only takeaways or delivery when the circuit breaker period started.
Delivery slots were also fully booked on many supermarkets’ e-stores last month, noted Mr Amos Tan, a senior lecturer at Singapore Polytechnic’s school of business.
The top-selling items in supermarkets include fresh food, frozen processed food, dairy products, eggs, condiments, baking-related items and snacks, a FairPrice spokesman said.
Comparing April with months in the previous quarter, Mr Vincent Tan, head of cards at OCBC Bank, said: “We have an unprecedented number of people staying, studying and working from home. Not surprisingly, customer spending on food deliveries increased as much as 50 per cent and almost doubled for grocery shopping.”
Food delivery players said they have seen a surge in orders, with Deliveroo seeing a 20 per cent increase in orders from February to last month compared with the weeks before.
The Covid-19 outbreak will likely be a turning point for e-commerce around the region… as new users become accustomed to the platforms and continue shopping online even when the circuit breaker ends.
MS LEE JU YE, Maybank Kim Eng economist, on the new normal.
We have an unprecedented number of people staying, studying and working from home. Not surprisingly, customer spending on food deliveries increased as much as 50 per cent and almost doubled for grocery shopping.
MR VINCENT TAN, head of cards at OCBC Bank, comparing April spending with months in the previous quarter.
ONLINE RETAIL BOOM IN SOUTH-EAST ASIA
Online retail sales in South-east Asia surged during the pandemic, with digital marketing solutions provider Criteo finding that e-commerce takings soared 96 per cent compared with the same period last year, for the week that ended on May 11.
Top categories of items bought online include the following, with the percentages reflecting sales increases in the week ending May 11 compared with January:
EXERCISE BANDS: 323%
PET GROOMING SUPPLIES: 242%
WEB CAMS: 217%
JIGSAW PUZZLES: 214%
BEAN BAG CHAIRS: 165%
SEASONINGS AND SPICES: 157%
DEODORANT AND ANTIPERSPIRANT: 157%
SHAVING AND GROOMING: 152%
SMALL ANIMAL SUPPLIES: 135%
YOGA AND PILATES EQUIPMENT: 132%
CONDIMENTS AND SAUCES: 130%
Coffee and breakfast offerings picked up by over 50 per cent since the tightened measures that closed bubble tea shops, while fast-food orders also rose by more than 50 per cent.
Grab saw orders for “comfort food” such as burgers and fried chicken grow over 30 per cent last month. Dessert orders also grew twofold from March, with frozen yogurt in the lead.
People were also buying local drinks, Milo, mala peanuts, seaweed, bubble tea pearls and boba ice cream, Shopee said.
But besides food to fuel themselves, people were also rushing to buy indoor sports equipment, games and furniture.
Lazada ranked video game consoles and accessories, home office furniture and fitness equipment among the top categories of goods bought during this period, with each category growing more than 1,000 per cent in sales volume.
Sporting goods retailer Decathlon said best-selling products have shifted from outdoor to indoor sports, with growing interest in cross-training and yoga, for instance, as well as strong demand for its Triban mountain bikes and city bikes.
Meanwhile, customers were also buying home office related products such as swivel chairs and desks from furniture business Ikea.
A spokesman said: “We have seen an uplift in our April online sales by 21/2 times – a very encouraging positive result for our business during this challenging time. Consumers are also spending a lot of time in the kitchen these days and the online demand for our cooking products has increased up to seven times prior to Covid-19.”
Web traffic for Ikea leapt 63 per cent during this period compared with the start of last year.
Ms Lee from Maybank Kim Eng said: “The Covid-19 outbreak will likely be a turning point for e-commerce around the region… as new users become accustomed to the platforms and continue shopping online even when the circuit breaker ends.
“Social distancing measures, which will stay in place for the foreseeable future after the circuit breaker ends, will likely mean (in-store) shopper traffic in the new normal will be lower than pre-Covid, and more people will choose to shop in the comfort of their own homes.”
DBS group research analyst Alfie Yeo added: “It creates a more efficient shopping experience… without a need to review products at stores and being able to make purchases at any time. There will definitely be a spillover of consumers online (from this period).”
This will also change how retailers conduct business.
Mr Tan said: “One big lesson that most businesses will learn from this situation is that they need to buck up on their online business presence or even strategy to be better prepared.
“Consumers who are experiencing online buying for the first time during this period are also more receptive to online when it continues to grow.”
Ms Pauline Lemaire, director of account strategy for large customers for South-east Asia, Hong Kong and Taiwan at online advertising firm Criteo, added: “We expect that the top product categories we are seeing now will still continue to remain popular after the circuit breaker lifts.”
“Some shoppers might choose to be more cautious and focus their spending power on essentials only, given the economic downturn,” she added, advising brands and retailers to pay closer attention to changing consumer sentiment as people go through various phases post-circuit breaker.