Huge opportunity for convenience in Southeast Asia

Date : 20 September 2021

Soo-Eng Tan

Senior Retail Analyst

Southeast Asia's convenience channel is expected to grow at a CAGR of 9.1% from 2020 to 2022.

Southeast Asia is a convenience hotspot

It has the highest concentration of convenience sales relative to other regions. Its total convenience sales value in 2020 is US$36bn.

 

Source: IGD Research

Convenience is growing in importance

It will widen its lead over other physical channels, accounting for 47% of modern trade in 2022, up from 46% in 2020. The channel will add about US$6.8m to the grocery retail market, contributing 60% of total sales growth from 2020 to 2022.

 

Source: IGD Research

International and local retailers operate different formats

In Southeast Asia, convenience stores are typically less than 500 sq m. We have segmented stores into three categories based on their offer and the missions they serve. Many international chains operate kiosk or CVS formats, while local retailers tend to focus on minimarket formats. All stores trade across a variety of locations, with offer and space flexed accordingly. As retailers open more stores and these service a greater variety of locations, there is a blurring of store types and formats.

 

Source: IGD Research

Top 10 convenience retailer and format in Southeast Asia

Majority of the growth in convenience is driven by new stores openings from 2020 to 2022:

  • CP Group, Indomaret and Alfamart are the three largest retailers in the region, with Indomaret growing the fastest due to its focus on physical stores expansion.
  • SM Retail (Alfamart) is rapidly adding locations that are within walking distance of local residents and in 2020 opened its 1,000th store. Berli Jucker’s main grocery business is in Big C hypermarkets in Thailand. It is focusing its investment on the convenience format until the economy recovers from the pandemic
  • 99 Speedmart and Bach Hoa Xanh are minimarket retailers that have stores in residential areas and provide a wide range of daily needs like rice, noodles, baby milk powder and fresh products at competitive price points

 

Want to know more?

Subscribers can learn more about the growth prospects and profiles of top four retailers. Read the full report here.