India Online Grocery Market: West India Is Projected To Be The Second Fastest-Growing Region With A CAGR Of 37.3%
India Online Grocery Industry Overview
The India online grocery market size is projected to reach USD 38.9 billion by 2028, according to a study conducted by Grand View Research, Inc. It is expected to expand at a CAGR of 37.1% from 2021 to 2028. The online grocery market in India has been thriving with consumers favoring the convenience of online shopping over neighborhood grocery retailers. Amid the COVID-19 pandemic, people have been careful to step out from the safety of their homes.
A rising number of individuals are shifting toward online grocery shopping for meeting their needs during the time of social distancing. The online grocery market in India, while still in its nascent stage, witnessed remarkable growth during the pandemic period and is set to pick up significantly as social distancing becomes the new normal and as traditional grocery retailing loses appeal across hitherto experience. Additionally, growing smartphone usage, coupled with the proliferation of the internet, is a key factor expected to boost market growth over the forecast period.
Furthermore, a rise in investments of Venture Capital and Private Equity (PE) funds into India's consumer internet and online retail sectors are likely to support the growth of the market. Moreover, in the coming years, the industry is expected to be driven by consumers using local languages over English from Tier-I as well as Tier-II and III cities. Hence, key players in the market are looking forward to adapting their platforms to local languages and establish improved voice search features to build their potential consumer base. Other appealing offers like fast delivery or same-day delivery, low delivery charges, cashback offers, and flexible return policies by online grocery platforms are also expected to drive the market in the foreseeable future.
Online grocery shopping is seen to be highly convenient and user-friendly; however, it has its challenges. A personalized experience, lack of physical evidence, and checking the product for its freshness before the purchase is absent while shopping online. The growing awareness of fitness and well-being, eating fresh and healthy food raises concerns about buying groceries online. Moreover, frauds associated while making an online purchase and payments, delays in the delivery, and delivery of damaged or expired goods are some of the other factors that are likely to hinder the market growth. Nevertheless, the adoption of the Internet of Things (IoT) is projected to provide lucrative opportunities for the market over the forecast period. IoT aids e-commerce companies keep track of their inventory with the use of IoT enabled devices within the network. These IoT-enabled devices help retailers provide real-time data and analyze the demand for several products across different regions and cities.
India Online Grocery Market Segmentation
Grand View Research has segmented the India online grocery market on the basis of product type, payment method, and region:
Based on the Product Type Insights, the market is segmented into Fresh Produce, Breakfast & Dairy, Snacks & Beverages, Meat & Seafood, Staples & Cooking Essentials, and Others.
- The staples and cooking essentials segment dominated the market with a share of 33.9% in 2020. This significant share is attributed to the constant shopping of staples that include flours, food grains, and cooking essentials like refined oil that are basic requirements of many.
- The breakfast and dairy segment is expected to expand at a growth rate of 37.6% over the forecast period. This is attributed to the growing demand for dairy products, such as yogurt, milk, and curd. These products are a daily necessity for people and have a short lifespan as compared to other products.
Based on the Payment Method Insights, the market is segmented into Online, and Offline (Cash on Delivery).
- The online segment dominated the market with a share of 63.8% in 2020 and is expected to expand at the highest CAGR during the forecast period. The growth of this segment is attributed to the growing preference for online payments.
- Cash still accounts for a substantial share in India’s online grocery payment market. This is mainly due to the enduring popularity of cash-on-delivery methods, which allow e-commerce merchants to reach rural and unbanked customers and decrease the issues of payment losses owing to non-payment.
Key Companies Profile & Market Share Insights
The market is fragmented and characterized by extreme competition amongst the players. Key players are focusing on growing their market presence by implementing various strategies, such as partnerships, mergers & acquisitions, and geographical expansion. These strategies help the market players expand their businesses geographically and enhance their offerings across the national and international markets.
For instance, in November 2020, Amazon India Pvt. Ltd. commenced the operations of its online grocery store Amazon Fresh in 4 more cities, namely Pune, Ahmedabad, Kolkata, and Chennai. The company stated that the service has been initiated in these cities through the expansion of its specialized geographical network that facilitates ultra-fast delivery services of groceries and daily essentials under the Amazon Fresh Store on Amazon.in. Some prominent players in the Indian online grocery market include:
- 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)
- UrDoorstep eRetail Pvt. Ltd.
Order a free sample PDF of the India Online Grocery Market Intelligence Study, published by Grand View Research.
About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.
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Grand View Research, Inc.
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