Singapore’s online grocery market has grown rapidly over the past few years and IGD expects sales to more than triple by 2020. Although only a small part of the overall market today, with 1.2% of sales online, we estimate that by 2020 around 3.9% of Singapore’s grocery sales will be online, equating to approximately S$0.5 billion a year. The growth of online grocery retailing is a global trend, driven by a combination of technology, how we live our lives today and retailers following this trend by investing in their offer.

Singapore has all the ingredients for online grocery retailing to be a big success in the region. With one of the highest broadband and smartphone penetrations globally, Singapore has excellent communications technology. Linked to this, high levels of employment and the increasing presence of dual income households mean that we are living busier lives and looking for more convenient ways to do our grocery shopping. From a retailer’s perspective, Singapore has high population densities and a constrained geography, which makes delivering products to shoppers’ homes more efficient and less expensive when compared to other markets around the world.

As a result, retailers in Singapore have started investing more in their online grocery services in the last few years. Fairprice and Cold Storage were two of the first retailers globally to launch an online home shopping service in the mid-1990s. However, competition in this area remained relatively weak until RedMart entered the market in 2011, followed by Giant and Sheng Siong launching their services in 2013. There are also a huge number of smaller and larger businesses entering this space, ranging from fresh food online business Open Taste to Amazon, which has declared that it is due to launch in Singapore in early 2017.

Improvements in technology and also innovations that make online grocery shopping easier and more convenient will continue to drive this trend forward. A great example is how we can now all shop via our mobile phones whenever and wherever we like. Asia is a region leading this trend globally, particularly in its developing markets, where the majority of people access the internet via their smartphones. For example, the retail giant Alibaba announced that a huge 69% of people who purchased something during its 11.11 event in 2016 did so via their phones – a number that far exceeded what we would expect in Europe or North America.

Retailers continue to experiment with new solutions that will make online grocery retailing even more appealing and accessible in the future. For example, retailers can collect data online about shopping habits and will be able to deliver personalised promotions on products that you most often buy. Retailers are also looking to make deliveries faster, either by partnering with third-party services providers to deliver products, such as Fairprice working with delivery solutions business Honest Bee in Singapore, or by testing drones that automatically fly products to customers.

Increasingly, with further improvements in wireless communications, more products in the home will be connected, allowing us to easily reorder the products we most regularly buy. For example, Amazon partnered with Tide washing powder last year to allow people to attach an automatic re-ordering button on their washing machine. By simply pressing the button, the user could add a pack of Tide to their next Amazon shopping basket. Eventually this type of technology will be built into our home appliances – Samsung by 2020 aims to have all new devices internet enabled. Sensors in fridges, and even bins, will alert us to products that are going out of date, or what we have run out of and suggesting what we should reorder.

Although, this might feel very futuristic, all these technologies are already being tested by retailers. Online grocery therefore provides an exciting growth opportunity for retailers, suppliers and also other industries, with Singapore well placed to capitalise on this trend.

To find out more about IGD’s Asia-Pacific research, read the Singapore Country Profile on IGD Retail Analysis and sign up to its Asia-Pacific newsletter

Nick heads up IGD’s research across Asia-Pacific, having previously worked in a variety of roles at Tesco. Follow @IGDAsia on Twitter.