Online Grocery & Food Shopping Statistics
Gone are the days when you had to walk down to the weekly ‘haat’ to get fresh vegetables or to the dairy to get milk every evening. Today, it’s delivered home. The online grocery market in India is believed to be in its nascent stages but growing steadily. One of the rare positives to have occurred because of the covid-19 outbreak is be the accelerated growth of this sector growth. A number of players have emerged with some focusing only on certain categories like milk products while others offer a complete range of grocery needs.
Size of India’s Online Grocery Space
As of 2019, 0.2% of India’s grocery shopping was done online. The total grocery market in the country was estimated to be over USD 500 billion . The market is expected to grow at a Compound Annual Growth Rate (CAGR) of 55% for the next few years. When India went into lock down mode, the average basket size increased basket size increased by about 20% while the number of total orders placed was a little short of doubling.
The online grocery market can be categorized as regular groceries, express deliveries, daily essentials and fresh meat. According to the gross merchandise value, regular groceries accounted for 75% of all purchases. However, in terms of orders, daily essentials made up the highest percentage with 38% of all orders. Regular groceries only accounted for 36% of orders. Fresh meats accounts for only 4% of the gross merchandise value and 6% of total orders.
In terms of structure, large verticals account for 71% of the market while omni channel players i.e. those who have brick and mortar stores as well as home delivery account for only 3%. Players offering daily essentials and other e-commerce platforms that offer groceries as only a part of their total offerings have captured 9% each of the market. Players specializing in only one category, for example, meats account for 3% of the market.
Online Groceries and Geography
Unlike other e-commerce ventures, groceries have been limited to larger cities. Players offering daily essentials such as milk, bread, eggs, etc. service metro cities like Delhi, Bombay, Pune, Hyderabad and Bengaluru. They are more focused on penetrating these markets as compared to expanding to other cities.
Category Segregation
Online grocery players offer a wide range of products. This includes kitchen staples, fresh groceries, ready to eat foods, cleaning supplies and miscellaneous items. Of this the ‘Fresh’ segment dominates the market.
Online Grocery Growth Drivers
From 2018 to 2019, India saw a 106% year on year growth for the hyperlocal e-grocery market. This growth is driven by a number of factors.
Convenience
It goes without saying that having groceries delivered to your front door is more convenient than having to go down to the market. Essentials like milk and bread can be delivered early in the morning while express deliveries can be made at preferred time slots that match the consumer’s schedule.
Hygiene
Home delivery of products like milk is not new in India. Since the time of our grandparents, every neighborhood has a ‘Doodhwala’ making the rounds every morning. However, there was always the fear of adulteration and poor hygiene. By delivering sealed branded groceries, e-commerce ventures have maintained the convenience of home delivery with better hygiene standards.
Assortment
One of the reasons, Indian consumers have been slightly slow to adopt online grocery shopping is the prevalence of innumerable grocery shops on ground. However, though many of these shops offer home delivery, they hold limited stocks. On the other hand, online grocery stores offer a wide variety of items ranging from fresh fruits and vegetables to bath soaps and cleaning supplies.
Subscriptions
Subscription services are beneficial for buyers and sellers. Online grocery verticals have converted 30–40% of their total consumer base to subscribers. Subscribed orders accounted for 60% of the gross merchandise value in 2019. For the sellers, this is assured sales and for consumers, it offers better prices and free/priority delivery. Consumers have even been willing to pay an annual fee to become premium subscribers.
Express delivery
Online grocery apps (stores) give consumers the choice to select delivery slots as per their convenience. They also offer same day delivery in metro cities. The quick delivery and easy scheduling have made them preferable to physically visiting markets to ordering from local stores.
To Conclude
Online groceries are a fast growing sector in the Indian market. According to statisticians, the market will continue to be served by multiple models including supermarkets and category specialists. By 2023, the value of this market is approximated to reach INR 1,034.13 Bn. This would mark a growth of 972.12 Bn since 2018. It is thus, not surprising to see a growing investor interest in this sector. The future is bright for online groceries.
