Online Grocery Market Revenue Forecast Report: Size, Share, Recent Trends, Strategic Developments, Segmentation Analysis, and Evolving Opportunities, 2023–2030

Market Overview

The global online grocery market is expected to reach USD 1,667 billion by 2030 from an estimated USD 346 billion in 2023, witnessing 25.2% CAGR during 2023–2030.

The outbreak of the epidemic has led to a shift in customers' shopping behaviors, also driven by the numerous choices for online shopping. The development of the e-commerce sector is the pivotal factor boosting this trend. Moreover, grocers are launching pioneering delivery models and offering appealing discounts to entice customers. Further, the increasing per capita income because of the rampant urbanization is playing a vital role in the development of the industry.

Delivery choices such as instant or one-day deliveries and click-and-collect options are becoming increasingly popular, with online platforms also providing contactless deliveries and order tracking facilities. Moreover, small-scale online players are teaming up with third-party portals to enter the industry, while food delivery channels are also discovering the online grocery industry to be profitable.

Amidst the pandemic, the obtainability of delivery time slots, less service fees, and the ease of click-and-collect shopping encouraged people to go for online grocery shopping. Market players are dynamically building click-and-collect abilities to guarantee a desirable purchaser experience across their network of stores.

Moreover, the online channel now provides more choices for customers as compared to the orthodox channels. E-commerce platforms permit customers to compare numerous items and take a knowledgeable purchasing decision. This is also showing new horizons for grocers to spread brand awareness, while concentrating on quality. Features such as saved favorites and order history for reordering are also inspiring customers to buy groceries online.

Staples & Cooking Essentials Category Is Leading Industry

The staples & cooking essentials category is dominating the industry, credited to the repetitive purchasing of staples, such as food grains, flours, and cooking oil. These products are considered necessities, especially in households throughout the APAC region. The category is projected to advance over the forecast period further as customers remain uncertain about going out and shop for things they need on a daily basis and desire avoiding crowds.

Breakfast & Dairy Category Is Projected To Grow at Fastest Pace

The breakfast & dairy category is set to showcase the highest CAGR over this decade. Just like cooking essentials, an increasing number of people are purchasing their milk, bread, eggs, packaged cereals, and other breakfast essentials on e-commerce portals. For milk, breads, and other repetitive purchases, many people buy subscriptions online, wherein the portal delivers the products at the door at a specified time. A frantic lifestyle and the increasing per capita income are further encouraging consumers to order such items from online channels, rather than going to a physical store.

Fast Growth in Internet and Smartphone Usage

More individuals are getting their own smartphones and access to the internet, which is allowing them to discover and use online channels for their grocery requirements. With just a few clicks on their mobile, customers can look through an extensive variety of items, compare costs, and suitably place orders. This augmented connectivity has filled the gap between customers and online grocery channels by making it simpler for them to use such facilities.

Essentially, the convenience provided by smartphones and the internet has transformed the way people shop for groceries, driving a shift away from visiting the market to buying from the home or on the go. Already, e-commerce accounts for almost 20% of the global retail sales, with groceries among the newest additions to the list of things bought online.

Home Deliveries Preferred over Click-and-Collect Orders

The home delivery category has been generating the higher revenue in the delivery type segment. This is because of the convenience of home deliveries over the click-and-collect model, especially amidst the heightened awareness of social distancing since the pandemic. Further, lifestyles have become increasingly busy these days, which leaves people with inadequate time to visit the store to pick up the stuff they have already ordered.

Growing Popularity of Online Grocery Subscriptions

On the basis of payment model, the subscription-based category is set to witness a robust CAGR in the years to come. Buying a monthly or longer subscription saves customers the trouble of paying for every order individually. They can simply add the stuff they would need the most, such as bread, milk, eggs, and fruits and vegetables, to their subscription, select an optimum contract duration, and make the entire payment in one go.

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APAC Is Dominating Market

APAC has dominated the market in recent years, and the region is also projected to grow at the fastest pace in the future. This can be credited to the steps being taken by the government of nations such as China and India to encourage digitalization and e-commerce. For example, in 2016, the Government of India permitted 100% FDI in food retail, including via e-commerce platforms, given that the products are processed, produced, and manufactured in the country itself.

Further, China and India have the largest smartphone user base, thus offering e-commerce companies a vast consumer pool to target. Moreover, in recent years, the employed population has risen. This means fewer people than before have the time to go out and shop, which translates into an increasing number of customers buying their groceries online.

North America also holds a significant market share, as it is home to numerous large e-commerce companies, such as The Kroger Co., Walmart, Target, Instacart, and Amazon.com. Moreover, in August 2020, Walmart and Instacart partnered for same-day grocery distribution, to enhance their competitiveness against Amazon in the thriving online grocery market, in view of COVID-19. Walmart's online grocery delivery facility is available through Instacart in four pilot cities: San Francisco, Tulsa, Los Angeles, and San Diego.

Recent Developments

In June 2023, the Indian Council of Agricultural Research inked a memorandum of understanding with Amazon Kisan to educate farmers on the latest agricultural technologies and ensure the availability of fresh, high-quality produce on Amazon Fresh.

In April 2022, Retail Concepts, which operates BigBasket, received INR 1,000 crore from Tata, its parent company. BigBasket has also introduced many new delivery choices, such as BBNow, which delivers groceries in select metropolises in 15 to 20 minutes, via dark stores in planned locations.

Key Companies in Online Grocery Market

• Amazon.com
• Alibaba.com
• Rakuten Group Inc.
• JD.com
• Walmart Inc.
• Maplebear Inc. (Instacart)
• AEON Co. Ltd.
• Blink Commerce Private Limited
• Natures Basket Limited
• Reliance Retail (Reliance Fresh)
• Supermarket Grocery Supplies Pvt. Ltd. (BigBasket)
• Target Brands Inc.
• Tesco.com
• The Kroger Co.
• Best Buy Co. Inc.