Baby boomers join Chinese seniors in buying groceries online

Baby boomers join Chinese seniors in buying groceries online

Staff Writer
Staff Writer
Pinduoduo Content Team
February 22, 2021

Xu Yuan is among the army of workers keeping China's kitchens stocked with fresh produce and other household essentials through the weeklong Lunar New Year public holidays, when most businesses are shut.

Xu works for an online grocery startup in Wuhan, which was locked down for 76 days a year ago to stem the spread of the Covid-19 coronavirus. The lockdown pushed consumers to go online to buy their fresh produce and household essentials, a change in habit that is expected to double the market for online groceries in China to about 820 billion yuan ($127 billion) by 2023 from last year, according to iResearch.

Packers and delivery workers preparing fresh produce for delivery in China.

This year, there will be no panic buying or shortages. Xu and her colleagues have been preparing for the February holiday break since the beginning of the year, working with suppliers to stockpile items in demand and arranging for collection points to stay open during the festive period.

Whereas consumers used to stockpile food and other essential items in previous years to "get through the new year," grocery apps have made it possible for consumers to buy what they need when they need it.

Across the world, the shifting of grocery shopping online has been one of the most prominent changes in consumer behavior to emerge from the coronavirus crisis. Many businesses are betting that demand for grocery pickup and delivery will outlast the pandemic.

Contrary to popular perception that seniors are among the most resistant to adopting new habits, particularly those involving technology, older adults have been among the most enthusiastic in buying their groceries online.

That may have to do with the fact that older adults are at the highest risk for severe illness with Covid-19.

In the U.S., consumers 65 and older are the fastest-growing demographic of online shoppers, according to NPD Group's Checkout Tracking, which monitors online and in-store consumer receipts. Baby boomers are spending an average of $1,615 online from January to October last year, a 49% increase from the year earlier, while the frequency of purchases climbed more than 40%.

That has led retailers like Walmart to expand the use of high-tech systems to pick-and-pack online grocery orders. Last month, Walmart said it will turn dozens of its stores into fulfillment centers, transforming part of the store space into automated warehouses. Robots will retrieve popular items, while personal shoppers will handle fragile items like produce.

Walmart packing station.

"As we move ahead, we don't see the use of these services changing in the future," said Tom Ward, senior vice president of customer product at Walmart U.S. "We expect that we'll continue to serve more and more customers who have come to rely on pickup and delivery as an important part of their lives."

Chip Bergh, 63, chief executive of denim maker Levi Strauss & Co., is among those who are done with the big weekly shops at the supermarket. "I don't think I'll ever go back to a grocery store," Bergh told The Washington Post. "I’m one of those people who likes to go grocery shopping, but I haven’t stepped foot in one during the pandemic. It works well enough.”

In the U.K., internet-only grocery retailer Ocado reported a 35% gain in full-year sales as consumers scrambled for online grocery delivery slots to get through a raft of social distancing measures and two national lockdowns.

Tim Steiner, co-founder and CEO of Ocado, said he did not expect an easing of the pandemic to shrink the online grocery shopping market. “Once people have tried this three to five times, they tend to stick with it,” he said. “It will just keep growing.”

Competition in the grocery delivery business in London.

In the Middle East and Asia, online grocery penetration is also rising rapidly due to the coronavirus. Kuwait’s online grocery market surged to more than $500 million last year, up from $100 million in 2019, according to RedSeer Consulting. Both the United Arab Emirates and Saudi Arabia doubled their markets in 2020.

According to a forecast by L.E.K Consulting, Indonesia, the most populous country in Southeast Asia, could see its online grocery market jump to $6 billion by 2025, from around $1 billion currently.

Back in China, “damas” like Madam Yang, 54, are taking advantage of the festive promotions to pick up bargains and send them to her mother back in their hometown. (“Dama” is a Chinese term referring to middle-aged women, a key consumer demographic as many control the family purse strings.)

A Pinduoduo customer receiving her package of groceries.

Online sales of regional culinary highlights have surged since January as consumers stocked up on their hometown specialties, according to Pinduoduo. Favorites include Chengdu firm tofu, Hunan grandma’s dish, Wuhan hot, dry noodles, Liuzhou snail rice noodles, Guangdong-style sausage and Ningbo rice cake.

“The Lunar New Year is a time for reunion,” said Andre Zhu, Senior Vice President of Strategy and Legal at Pinduoduo. “In this time when some of us may have to be apart, we are glad that we can help families connect and send their love and best wishes.”