Growing Trend of Online Grocery Shopping Drives the Road Transport Refrigeration Market in Australia
Development of Online Grocery Shopping Market in Australia
In the past, Australians were reluctant to shop for groceries online. However, today more and more Australians have started buying groceries online to save energy and time, especially during the outbreak of coronavirus. Online grocery shopping enables Australians to stay safe by minimizing physical contact. What’s more, older Australians increasingly take up online grocery shopping to minimize risk of COVID-19 exposure. It was reported that online grocery shopping orders of Woolworths and Coles have increased by 189% since March, 2020.
The online grocery industry in Australia is rapidly expanding. It has demonstrated strong growth in the past five years (sales with an annual growth of 21.7%); According to IBISWorld, online grocery sales are expected to increase by 56% in 2019-20.
What Drives the Prosperous Online Grocery Shopping Market in Australia in the Past Few Years?
1) Rise of E-Commerce in Australia
The rapid development of Internet technology has created a growing capability for Australians to shop online. The existence and rise of e-commerce businesses have changed the way a majority of everyday Australians does their grocery shopping. Online grocery shopping is a becoming a trend not only in Australia but in the global.
Woolworths, as the largest supermarket chain in Australia, has the first-mover advantage in the battle for online grocery shopping supremacy in Australia. Online grocery retailers in Australia are accelerating their investment in e-commerce and digital to keep up with customers’ expectations. Woolworths and Coles are augmenting their bricks and mortar stores to create seamless omni-channel shopping experiences. Both of them indicated that their online food and groceries channels were growing at in excess of 30%.
Consumers is more likely to consider e-commerce capability when online shopping their groceries. This rise in the e-commerce sector for groceries simultaneously promotes the fast development of online grocery shopping market in Australia.
2) Online Shopping Convenience and Flexibility
Convenience is the major driver behind the popularity of online grocery shopping. To attract existing and potential customers, online grocery retailers in Australia are expanding their coverage. Taking Amazon for example, amazon.com.au says there are 80 million items available for online shopping - from staples, vegetables, meat, fish, gourmet items, and household goods to personal care items etc. For customers, it is extremely convenient to purchase or order various grocery goods through online retailers’ websites or APPs staying at home. It’s the grocery retailers’ job to do the subsequent work including picking, packing and delivering goods directly to consumers.
In the past, it’s difficult to sell and deliver refrigerated goods to consumers. However, nowadays, almost all grocery stores in Australia offer a great variety of timely and perishable good which can be delivered to apartments, homes and office.
It seems that convenience and time saving are often recognized with the use of online grocery shopping among online shoppers. Owing to the convenience in online grocery shopping, the e-grocery market is witnessing significant growth in Australia.
3) Advanced Transport and Refrigeration Technologies
Refrigeration logistics allows foods to be transported long distances from grocery stores to apartments and home. Chilled foods and value added fresh produce require refrigeration for safety and quality reasons.
◆ Advanced refrigerated transport technology delivery chilled and frozen goods to consumers’ doorsteps. Online grocery retailers in Australia are willing to invest in new refrigerated trucks and other effective solutions to get doorstep delivery for fresh groceries in time and in excellent quality.
◆ Temperature control technology caters to Australian’s rising demand on perishable food. Such units and systems, such as truck refrigeration system, extend the shelf life of perishable products.
◆ Cold chain logistic facilitates Australian retailers to store and transport perishable produces such as fruits, vegetables, which is one of the important reason that drives more Australians migrating to online ordering of their groceries. Consumers appreciate the convenience of enabling to order at any time for direct delivery.
The Increase in Online Grocery Shopping Impacting Positively on the Growth of Australian Transport Refrigeration Units Market
One the one hand, to meet the increasing demands of home delivery and consumers’ strict criteria, online grocery retailers need to run an end-to-end cold chain. The expanding of online supermarket business in Australia is the primary driving force behind the growth of refrigerated transportation market to deliver perishable goods, subsequently driving the demand for transport refrigeration systems market.
Thermo King and Woolworths have signed a 2-year supply contract, delivering more than 450 refrigerated trucks installing with direct drive refrigeration unit, to meet the increasing demands of Woolworths online supermarket business. According to Thermaxx, Woolworths will have received over 1,000 Thermaxx two-compartment refrigerated trucks with multi-temperature vehicle refrigeration system by Dec. 2019 to manage its rising online grocery delivery service.
On the other hand, competition among food retailers are more and more intense, transport refrigeration systems are essential to shipping food over long distances, therefore the demand for on-the-go refrigeration technology is more pressing than ever. The online grocery shopping market is seeing an enhanced focus on refrigeration.
All of this has had an positive impact on the growth of cold chain and road transport refrigeration logistics in Australia. The shift in Australian’s preferences from the brick and mortar stores to online sites, has significantly contributed to the growth of transport refrigeration unit.
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