Food tech has emerged as a particularly fast-growing segment in the broader e-commerce boom fuelled by the coronavirus (COVID-19) pandemic. This trend is especially pronounced in emerging markets, where local players are trouncing global e-commerce giants like
Consumers around the world flocked to online shopping when the pandemic hit. But the lifting of lockdowns hasn’t stopped this trend, with people increasingly opting for the speed and convenience of e-commerce. In particular, the pandemic led millions of customers to try online grocery shopping for the first time – forcing supermarkets and larger online platforms to expand their food tech capabilities in response to surging demand.
Grocery delivery has now become a key driver of e-commerce growth, particularly in emerging markets, where lower levels of online penetration in the pre-COVID era have presented a major expansion opportunity for the sector.
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And investors are betting heavily on this growth.
Online groceries have also seen explosive demand in
About a dozen domestic players account for almost 90% of food deliveries in
Among these companies, VkusVill – a fresh dairy product vendor-turned major health food brand and retailer – posted by far the largest growth in online grocery of 437% year on year. These results are all the more impressive given that VkusVill had close to zero e-commerce presence at the beginning of 2020. Today it has emerged as a leading food tech player, with online sales accounting for nearly 25% of turnover.
VkusVill will be an emerging market player to watch amid news that the company is reportedly preparing for an IPO. Among its unique features are a brand-centred approach – by some estimates, VkusVill is the leading health foods brand in
VkusVill’s example suggests that tech capabilities are only part of the recipe for market success. The other ingredients are strong brand recognition and an understanding of consumer tastes, which are shifting towards healthy foods. In that regard, VkusVill is reminiscent of health food brands like Chobani, the Greek yogurt maker which reportedly filed for an IPO in July, and Swedish vegan milk producer
Online grocery players in emerging markets have attracted strong investor interest with their variety of approaches to meeting customers’ rapidly evolving needs. Food tech will remain an exciting space for growth and innovation as companies across the world compete for a bigger share of the food delivery pie – and the race is just beginning.
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