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Forecast Period
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2025-2029
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Market Size (2023)
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USD4.45 Billion
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CAGR (2024-2029)
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34.1%
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Fastest Growing Segment
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Packaged Food & Beverages
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Largest Market
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North
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Market Overview
India Online Grocery Market has valued at USD4.45 billion
in 2023 and is anticipated to project robust growth in the forecast period with
a CAGR of 34.1% through 2029. The India online grocery market has undergone a
remarkable transformation in recent years, becoming one of the fastest-growing
segments of the e-commerce industry. This shift in consumer behavior has been
catalyzed by various factors, including changing lifestyles, increased
smartphone penetration, and the convenience offered by online grocery shopping.
The primary driver behind the surge in online
grocery shopping is the convenience it offers. Consumers can browse and order
groceries from the comfort of their homes, saving time and effort compared to
traditional brick-and-mortar stores.
Online grocery platforms provide an extensive range
of products, including fresh produce, packaged goods, dairy, and household
essentials. This variety allows consumers to explore different brands and
options, often with competitive pricing.
The adoption of digital payment methods, including
mobile wallets and UPI (Unified Payments Interface), has facilitated seamless
and secure transactions. This trend has further accelerated the growth of
online grocery shopping.
Some platforms offer subscription-based models
where customers can enjoy benefits like discounts, free delivery, and priority
access. These services encourage customer loyalty and repeat orders.
To meet the demand for quick delivery, many online
grocery platforms offer express or same-day delivery options. This ensures that
consumers receive their groceries promptly.
Efficient supply chain management is crucial in the
online grocery business to ensure the freshness and quality of products.
Maintaining a consistent supply chain, especially for perishable items, can be
challenging. Additionally, the online grocery market is highly competitive,
with several players vying for market share. This competition often leads to
price wars and aggressive marketing strategies. Furtehrmore, last-mile delivery
remains a significant logistical challenge. Delivering groceries to customers'
doorsteps, particularly in densely populated urban areas, requires
sophisticated routing and delivery systems.
In conclusion, the India online grocery market is
experiencing unprecedented growth, driven by consumer demand for convenience
and a wide product range. With key players continually expanding their services
and reaching new markets, the future of online grocery shopping in India looks
promising, with the potential to reshape the way Indians purchase their daily
essentials.
Key Market Drivers
Convenience and Time-Saving
One of the foremost drivers of the India online
grocery market is the unparalleled convenience it offers to consumers. In a
fast-paced world where time is a precious commodity, online grocery shopping
has emerged as a time-saving solution.
Online grocery platforms provide the convenience of
doorstep delivery. Consumers can order groceries from the comfort of their
homes or workplaces and have them delivered at a time of their choosing. This
eliminates the need for physically visiting brick-and-mortar stores, saving
both time and effort.
Long queues at supermarkets and the time-consuming
process of physically picking items, checking out, and then carrying bags home
are a thing of the past with online grocery shopping. Consumers can quickly
browse through a wide range of products, add them to their virtual carts, and
complete the purchase within minutes.
Online grocery stores are accessible round the
clock, allowing consumers to shop at any time that suits them. This flexibility
is especially valuable for working professionals, parents, and individuals with
busy schedules.
Expansive Product Selection
Another significant driver of the India online
grocery market is the extensive product selection and variety offered by these
platforms. Traditional brick-and-mortar grocery stores often have limited shelf
space, which can result in a restricted product range.
Online grocery platforms often stock specialty and
imported products that may not be readily available in local physical stores. This
is particularly appealing to consumers with diverse culinary preferences and
those seeking specific brands or international ingredients.
Many online grocery stores now offer fresh fruits,
vegetables, and meats with the assurance of quality and freshness. Some even
provide customization options, allowing consumers to select the ripeness of
their produce or the cut of their meat.
The online grocery market also caters to
health-conscious consumers by providing a wide range of organic, gluten-free,
vegan, and other health-oriented products. Shoppers can easily filter and find
items that align with their dietary requirements.
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Digital Payment Options and Discounts
Digital payment options and discounts have played a
pivotal role in driving the adoption of online grocery shopping in India.
The widespread adoption of digital payment methods,
such as digital wallets and Unified Payments Interface (UPI), has made online
transactions secure and convenient. Consumers can complete their grocery
purchases with a few clicks, eliminating the need for cash transactions.
Online grocery platforms frequently offer
discounts, cashback, and promotional offers to attract and retain customers.
These discounts can be especially appealing to price-conscious consumers
looking to save on their grocery bills.
Many online grocery retailers have introduced
loyalty programs that reward frequent shoppers with additional discounts,
exclusive offers, and other incentives. These programs encourage repeat
business and customer loyalty.
Online shoppers can easily compare prices across
multiple products and brands, enabling them to make informed purchasing
decisions. This transparency empowers consumers to find the best deals
and make budget-conscious choices.
Key Market Challenges
Intense Competition and Consolidation
The India online grocery market is characterized by
fierce competition among numerous players vying for market dominance. This
competition has led to aggressive pricing strategies and heavy investments in
marketing and logistics to capture and retain customers. The market has
witnessed significant consolidation, with larger players acquiring or merging
with smaller ones to gain a competitive edge.
This consolidation presents challenges for both
established players and newcomers. Established giants like BigBasket and
Grofers face pressure to maintain their market share and profitability amid
heightened competition. Meanwhile, newer entrants find it challenging to penetrate
the market due to the dominance of established players and the need for
substantial investments in technology and infrastructure.
The intense competition also exerts downward
pressure on profit margins, making it challenging for online grocery businesses
to achieve sustainable profitability. Many companies in this sector continue to
operate at a loss while striving to gain market share, which is unsustainable
in the long run.
Complex Supply Chain and Logistics
The online grocery business operates on a complex
supply chain and logistics model. Unlike traditional e-commerce, where products
can be stored in warehouses for longer periods, groceries have limited shelf
life and require stringent temperature and storage conditions. Managing
inventory, ensuring freshness, and minimizing waste become critical challenges
in this context.
Moreover, the last-mile delivery in the online
grocery sector is a significant logistical challenge. Ensuring timely and
efficient delivery while minimizing delivery costs is an ongoing struggle for
online grocery companies. Factors like traffic congestion, seasonal
fluctuations in demand, and the need for specialized delivery vehicles further
complicate the logistics.
Additionally, the perishable nature of many grocery
items means that returns and exchanges are more common in this sector compared
to other e-commerce categories. Handling returns efficiently, especially for
perishable goods, adds complexity to the logistics chain and can impact overall
operational costs.
Consumer Behavior and Trust
Changing consumer behavior and building trust in
online grocery shopping pose significant challenges for the industry.
Traditionally, Indians have preferred to select fresh produce and groceries in
person, inspecting items for quality and freshness. Convincing consumers to
transition to online shopping requires overcoming several hurdles.
Many consumers have concerns about the quality and
freshness of groceries purchased online. They worry that they may receive items
that do not meet their standards or have a shorter shelf life. Online grocers
must invest in robust quality control and packaging to address these concerns.
Timely and reliable delivery is critical to
building trust with consumers. Late deliveries, missing items, or damaged
products can erode trust and deter repeat business. Online grocery businesses
must maintain high standards of delivery reliability.
Online payment fraud and security concerns are
prevalent in India. Building trust in the online payment process is crucial to encourage
consumers to make digital transactions for their groceries. Providing secure
payment gateways and transparent refund policies is essential.
Key Market Trends
Rapid Growth of Online Grocery Market in India
The online grocery market in India has witnessed
explosive growth in recent years, driven by several key trends. First and
foremost is the increasing penetration of the internet and smartphone usage
across the country. With the advent of affordable smartphones and cheaper data
plans, more consumers are going online for their grocery shopping. This has
created a massive customer base for online grocery platforms.
Another contributing factor is the changing
lifestyle of urban Indians. Busy work schedules, long commutes, and the desire
for convenience have led many urban consumers to opt for the convenience of
online grocery shopping. It allows them to save time and avoid the hassle of
visiting physical stores, especially in densely populated cities.
The COVID-19 pandemic further accelerated this
growth as lockdowns and safety concerns prompted many consumers to turn to
online grocery shopping as a safer alternative to in-store visits. This surge
in demand during the pandemic led to increased investments in the online
grocery sector and the expansion of delivery networks, cementing its position
as an essential service.
Emergence of Hyperlocal Delivery Models
One of the most significant trends in the Indian
online grocery market is the emergence of hyperlocal delivery models. This
approach focuses on delivering groceries from local stores to customers within
a specific geographic radius. It offers several advantages, including faster
delivery times and a wide variety of products sourced from neighborhood stores.
Hyperlocal delivery models leverage technology to
connect local grocery stores with customers through mobile apps or websites.
This trend not only supports small, neighborhood stores but also provides
consumers with the convenience of shopping from their favorite local vendors.
Several established e-commerce and tech giants have
entered this space, further intensifying competition. As a result, consumers
can access a wide range of products, including fresh produce, dairy, and daily
essentials, through hyperlocal delivery services. This trend caters to the
demand for fresher products and quicker delivery, making it a win-win for both
consumers and local businesses.
Focus on Personalization and Customer Loyalty
Another notable trend in the Indian online grocery
market is the increasing emphasis on personalization and customer loyalty.
Online grocery platforms are leveraging data analytics and artificial
intelligence to understand customer preferences better. They use this
information to offer personalized product recommendations, discounts, and
promotions, enhancing the shopping experience.
These platforms are also implementing loyalty
programs and subscription services to retain customers. Loyalty programs
provide discounts, cashback, or exclusive access to certain products,
encouraging repeat purchases. Subscription models offer customers the
convenience of regular deliveries of essential items, such as milk, bread, and
fruits, at discounted rates.
Additionally, online grocery platforms are
investing in building strong customer service and efficient complaint
resolution mechanisms. This ensures that customers have a seamless shopping
experience and are more likely to return for their future grocery needs.
Segmental Insights
Product Type Insights
In recent years, the Indian online grocery market
has witnessed a remarkable transformation, with a surge in consumer demand for
convenience and a wide variety of products. Among the numerous categories
within this burgeoning industry, Packaged Food & Beverages stands out as a
dominant force. This segment, characterized by its diverse range of food items,
beverages, and ready-to-eat products, has secured a significant share in the
online grocery landscape for several compelling reasons.
One of the primary drivers behind the growth of
Packaged Food & Beverages in the online grocery market is the changing
preferences of Indian consumers. As urbanization continues to reshape
lifestyles, convenience has become a paramount concern for modern households.
Packaged foods and beverages offer a convenient solution, requiring minimal
preparation and enabling quick and hassle-free meals or snacks.
Online grocery platforms provide an extensive array
of packaged food and beverage options, catering to a wide spectrum of tastes
and dietary preferences. From traditional Indian snacks to international
cuisines, these platforms offer an unprecedented level of choice, empowering
consumers to explore and experiment with their culinary choices.
In urban areas, where time is often at a premium,
packaged food and beverages offer a respite from the demands of cooking
elaborate meals. As more individuals juggle busy schedules, the convenience of
having ready-to-eat or instant options becomes increasingly appealing, driving
the demand for packaged products.
Established brands in the Packaged Food &
Beverages segment have built a reputation for quality and consistency over the
years. Consumers tend to trust these brands, making them more inclined to make
online purchases in this category, especially when faced with the vast number
of options available.
Online grocery shopping platforms provide the
convenience of browsing, comparing, and purchasing packaged food and beverages
from the comfort of one's home. This accessibility has been a game-changer,
particularly during the COVID-19 pandemic, when safety concerns led to a surge
in online shopping.
Sales Channel Insights
Mobile applications have emerged as a driving force
in the flourishing online grocery market of India, securing a substantial share
in this dynamic industry. The convergence of digital technology, changing
consumer habits, and the convenience of mobile apps has transformed the way
Indians shop for groceries. This transformation can be attributed to several
key factors that highlight the growing influence of mobile applications in the
Indian online grocery sector.
First and foremost, the proliferation of
smartphones and affordable mobile data plans has made it easier than ever for
consumers across India to access online grocery platforms through mobile
applications. This widespread smartphone adoption has bridged the digital
divide, allowing people from various socio-economic backgrounds to participate
in online grocery shopping. Consequently, mobile apps have become an integral
part of daily life for millions of Indians.
The convenience factor offered by mobile
applications is a significant driver of their success in the online grocery
market. Shoppers can browse, select, and purchase groceries from the comfort of
their homes or while on the go, eliminating the need to visit physical stores.
This convenience is especially appealing in urban areas where busy lifestyles
and traffic congestion make traditional grocery shopping a time-consuming task.
Moreover, mobile apps have enabled online grocery platforms
to offer a seamless and personalized shopping experience. These apps often
incorporate features such as personalized recommendations, shopping lists, and
easy reordering of frequently purchased items. This level of customization
enhances user engagement and fosters customer loyalty, further solidifying the
position of mobile apps in the market.
The COVID-19 pandemic accelerated the adoption of
online grocery shopping in India, and mobile applications played a crucial role
in ensuring the continuity of essential supplies. Concerns about health and
safety led many consumers to shift from physical stores to online platforms,
and mobile apps provided a secure and contactless shopping experience during
these challenging times.
Furthermore, mobile applications have facilitated
the integration of various payment options, including digital wallets and
online banking, making transactions more convenient and secure. This
flexibility in payment methods caters to the diverse financial preferences of
Indian consumers, contributing to the popularity of mobile apps.
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Regional Insight
The North Region of India has emerged as a dominant
player in the rapidly growing India online grocery market. This region,
encompassing states like Delhi, Uttar Pradesh, Haryana, Punjab, and Rajasthan,
has seen a remarkable surge in online grocery shopping due to several key
factors, contributing significantly to its substantial market share.
Firstly, the North Region's dense urban population,
particularly in major metropolitan areas like Delhi-NCR (National Capital
Region), has driven the adoption of online grocery shopping. Urban dwellers,
with their fast-paced lifestyles and busy schedules, find the convenience of
ordering groceries online irresistible. The availability of a wide range of
products, from fresh produce to household essentials, at their fingertips makes
online grocery platforms an attractive option.
Secondly, the North Region's changing consumer
preferences have played a pivotal role in the growth of the online grocery
market. Consumers in this region are increasingly health-conscious and
quality-focused, seeking fresh and organic products. Online platforms offer a
diverse selection of premium and organic groceries, appealing to this discerning
demographic.
Thirdly, the region's often extreme weather
conditions, including sweltering summers and chilly winters, motivate consumers
to opt for the comfort and convenience of online shopping. Avoiding the hassle
of physically navigating crowded markets during harsh weather is a compelling
incentive for residents.
Moreover, the North Region's well-developed
logistics infrastructure and transportation networks contribute to the success
of online grocery delivery services. Efficient supply chain management ensures
that products are delivered promptly, even to remote areas, enhancing the
overall customer experience.
Another significant factor is the growing
penetration of smartphones and internet connectivity in the North Region. The
increasing digital literacy and smartphone usage make it easier for consumers
to access online grocery platforms and place orders conveniently through
user-friendly mobile apps.
Furthermore, the COVID-19 pandemic accelerated the
adoption of online grocery shopping across India, and the North Region was no
exception. Concerns about safety and social distancing measures led to a surge
in online orders for groceries and essentials, a trend that is expected to have
a lasting impact.
Recent Developments
- In 2023, The Indian Council of Agricultural
Research has entered into a Memorandum of Understanding (MOU) with Amazon
Kisan, aiming to empower farmers by providing them with scientific guidance for
optimal crop cultivation and income generation.
- In 2022, Innovative Retail Concepts, a subsidiary
of Tata Group and the operator of FMCG business BigBasket, has secured a
funding injection of USD120.09 million. BigBasket has also introduced various
new delivery options, including its recent launch BBNow, which ensures deliveries
in select metros within 10 to 20 minutes through strategically located dark
stores.
- In 2021, Blink Commerce Private Companies are
actively pursuing a sustainable future. In addition to replacing delivery
packaging, the company has implemented several sustainability programs to
minimize the packaging of private label products. These initiatives aim to
reduce the use of plastic in packaging essentials such as staples, atta, sugar,
and more.
Key Market Players
- Grofers India Private Limited
- Innovative Retail Concepts Private Limited (BigBasket)
- Amazon Retail India Private Limited
- Flipkart Internet Private Limited
- Paytm E-Commerce Private Limited
- Nature’s Basket Limited
- Omnipresent Retail India Private Limited (Spencer’s)
- Future Retail Limited
- Reliance Retail Limited
- Godfrey Philips India Limited (24Seven)
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By Product Type
|
By Platform
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By Region
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- Packaged Food & Beverages
- Personal Care
- Household Products
- Fruits & Vegetables
- Others
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- Mobile Application
- Desktop Website
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Report Scope:
In this report, the India online grocery market has
been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- India Online Grocery Market, By Product Type:
o Packaged Food & Beverages
o Personal Care
o Household Products
o Fruits & Vegetables
o Others
- India Online Grocery Market, By Platform:
o Mobile Application
o Desktop Website
- India Online Grocery Market,
By Region:
o North
o South
o East
o West
Competitive Landscape
Company Profiles: Detailed analysis of the major companies
present in the India online grocery market.
Available Customizations:
India Online Grocery Market report with the
given market data, TechSci Research offers customizations according to a company's
specific needs. The following customization options are available for the
report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
India Online Grocery Market is an upcoming report
to be released soon. If you wish an early delivery of this report or want to
confirm the date of release, please contact us at [email protected]