Riding on the surge in grocery demand in the COVID-19 times, online retail sales in Asia will grow from US$ 1.5 trillion in 2019 to US$ 2.5 trillion in 2024, with a compound annual growth rate (CAGR) of 11.3 percent, a new Forrester report said on Friday.

Due to the pandemic, adoption of online grocery is getting a boost, with an expected CAGR growth of 30 percent during the forecast period and online penetration doubling from 5.1 percent in 2020 to 10.6 percent in 2024.

“Grocery is the largest retail category, accounting for 35 percent of total retail sales in 2019 but just 6 per cent of online retail sales. This makes it an important category for retailers and one that is going to drive future growth of online retail sales,” said Satish Meena, Senior Forecast Analyst with the global market research firm Forrester.

“Driven by the uptick in online grocery adoption due to COVID-19, online retail sales will grow at a CAGR of 30 percent from 2019 to 2024 and reach $359 billion,” Meena added.

India is witnessing a surge in demand for online grocery.

The latest Reliance takeover of Future Group’s retail business is a major consolidation of organised grocery retail.

In terms of grocery retail, the revenue of Reliance Retail in FY20 was Rs 346 billion and that of Future Retail’s annualised revenue of FY20 was Rs 100 billion.

Earlier reports said that Reliance’s partnership with Facebook could result in the company becoming a market leader in the online grocery space.

According to Meena, grocery will also be the category where most marketplaces’ investment will be made in the next five years.

Online retail sales in Asia Pacific will get a boost from new buyers due to COVID-19, but at the same time, consumer spending will take a hit due to the slowdown of economies.

China will remain the largest market, reaching US$ 2 trillion by 2024 and accounting for 50 percent of global online retail sales in 2020.

In contrast to Europe and the US, the smartphone is the preferred device for online buyers in Asia Pacific countries.

“In 2020, 75.8 percent of online retail sales will occur on smartphones, and we expect online retail sales by smartphone to grow at a CAGR of 13.6 percent to reach US$ 2 trillion by 2024,” Meena said.