The global India online grocery market is projected to expand at a CAGR of 36% during the forecast period, 2020-2027. The growth of the market is attributed to -the changing lifestyle of consumers, rapid urbanization, and growing consumer inclination toward online shopping.
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Growing preference toward online shopping is owing to the emergence of COVID-19 outbreak across the globe. Various government restrictions to control the spread of the virus has led to increasing consumer awareness regarding convenient and safe shopping, thereby boosting the online grocery market.
Market Drivers, Restraints, Trends, and Opportunities
- Growing digital literacy and upsurge in Internet penetration are some of the key factors driving the market growth. Additionally, government initiatives to promote digital economy framework is expected to boost the market growth.
- Consumers living in metropolitan cities such as Bangalore, Chennai, Mumbai, and Delhi are more inclined toward online shopping owing to the availability of high-speed internet and logistical simplicity. Thus, factors are expected to boost the market growth during the forecast period.
- Rapid urbanization and growth of the e-commerce industry is driving the market growth.
- Various service providers are adopting innovative business models such as express and slotted or on-demand delivery models, thereby positively impacting the market growth.
- Attractive discounts offered by these service portals are boosting the market growth.
India Online Grocery Market Segment Insights
Staple & cooking essential segment anticipated to account a significant market share
On the basis of product types, the market is segmented into staples & cooking essentials and breakfast & dairy. The staple and cooking essential segment is anticipated to account for a market share of more than 25% owing to the consistent demand for flour, pulses, rise, lentils, food grains, and refined oil. The emergence of COVID-19, has encouraged consumers to stock up the essentials over the fear of lockdown regulation due to surging infection cases.
The breakfast & dairy segment is projected to expand at a CAGR of around 30% during the forecast period. Rising demand for consumer products such as milk, curd, and yogurt is expected to drive the segment growth. These products have a short life span as compared to other products and are daily essentials in the households of India. Moreover, these products cannot be stocked and have to be consumed within a particular time, which increases it frequency of order over the time.
Online segment expected to account a considerable market share.
Based on payment methods, the market is bifurcated into online and cash. The online segment is expected to account for a market share of more than 57% during the forecast period. Growing consumer preference for online payments is driving the segment growth. Additionally, in the wake of COVID-19 pandemic, consumers are avoiding physical contact to a greater extent, which is boosting the adoption of online payment. Growing consumer awareness regarding social distancing practices to prevent the spread of infection is encouraging consumers is further propelling the segment growth.
The cash segment is projected to expand at a healthy growth rate owing to the adoption of cash-on-delivery methods that allow e-commerce merchants to reach unbanked customers. Cash payment reduces the issues of payment losses. Large number of consumers in rural and sub-urban areas opt for cash on-delivery method owing to the security and confidentiality issues with online payments.
South India anticipated to account a large market share
In terms of regions, the market is classified as South India, North India, East India and West India. The market in South India is anticipated to account for a market share of more than 30% in terms of revenue. The presence of leading players such as BigBasket, Grofers India Pvt. Ltd., and Amazon India Pvt. Ltd. in this region is fueling the regional market growth.
Competitive Landscape
Some of the leading players in the India online grocery market are Amazon India Pvt. Ltd., Godrej Nature's Basket Ltd., Grofers India Pvt. Ltd., Paytm E-Commerce Pvt. Ltd. (Paytm Mall), Reliance Retail Ltd. (Reliance Fresh), Spencer's Retail, Supermarket Grocery Supplies Pvt. Ltd. (BigBasket), and UrDoorstep eRetail Pvt. Ltd.
Companies are focusing on improving their market presence by adopting various market strategies such as partnerships, mergers, and acquisitions. These strategies allow the manufacturers to improve their product offering and expand their market share.
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