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India Online Grocery Market Outlook

The India online grocery market size is predicted to reach a valuation of US$ 6.8 billion by 2033. Our food and beverage industry analysts opine that India online grocery providers can expect a CAGR of 7.8% through 2033, with a current valuation of US$ 3.2 billion in 2023.

Attribute Details
India Online Grocery Market Size, 2022 US$ 2.0 billion
India Online Grocery Market Size, 2023 US$ 3.2 billion
India Online Grocery Market Size, 2033 US$ 6.8 billion
Value CAGR (2023 to 2033) 7.8%

Key Market Highlights:

Indigenously Developed UPI Paving the Way for Success of Online Grocery Industry in India

The rise of digital payment methods is significantly influencing the development and evolution of the online grocery market in India. This change in the payment environment has significantly affected the digital grocery industry trends. Smartphones provide high accessibility to digital payment systems like digital wallets and UPI (Unified Payments Interface). Customers from rural and metropolitan areas alike find it convenient to use cashless payments for their online grocery orders, eliminating the requirement for actual currency exchanges. In conjunction with its Digital India effort, the Indian government has actively encouraged digital payments. Citizens have been urged to embrace digital payment systems by programs like demonetization and the promotion of UPI. Due to its interoperability, UPI, in particular, is increasing in popularity and boosting India online grocery market trends.

Several countries are adopting UPI, with Bhutan being the first one to adopt it in July 2021. India is reportedly keen on introducing UPI with 30 countries in the upcoming years. This development can boost India online grocery market’s potential substantially by offering globalized access to vendors and providers.

Tech Innovations Altering Market Dynamics

Technology advancements have drastically altered the Indian online grocery sector. These innovations cover a broad range of developments that boost overall market growth, transform the consumer experience, and streamline operations.

AI (Artificial Intelligence) and machine learning algorithms are two of the most well-known technological advancements. These technologies have made it possible for online grocery delivery services to offer individualized shopping experiences. AI-driven recommendation systems examine user activity and prior purchases to make product recommendations that are specific to each user's tastes. This improves client happiness, promotes customer loyalty, and makes the purchasing process more efficient. This also drives the online wholesale grocery market in India.

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Historical Performance of India Online Grocery Market (2018 to 2022) Vs. Forecast Outlook (2023 to 2033)

Attributes Details
Halal Food Market Size (2018) US$ 1.48 billion
Halal Food Market Size (2022) US$ 2.0 billion

In recent years, online grocery market in India has experienced impressive expansion as well as shifts. Due to variables like growing internet penetration, smartphone use, and changing customer tastes, this period has observed a significant growth in online grocery buyers. Online grocery purchase has become an everyday affair due to the market's growing adoption of digital channels.

Notably, e-commerce behemoths like Amazon and Flipkart entered India's online grocery delivery market, bringing significant infrastructure and resource investments. They increased competition, which sparked strong marketing and promotional campaigns that accelerated the market's growth.

Geographically, the market expanded its reach to include smaller cities, villages, and larger cities. Online grocery platforms could access underserved areas by extending into Tier II and Tier III cities, thereby expanding the market's reach.

For both domestic and foreign investors, Indian online groceries market continues to be lucrative. Market expansion will be fueled by ongoing investment inflows, allowing platforms to expand their businesses and provide better services.

A continuous rate of growth will be possible through loyalty programs, subscription business models, and targeted marketing. Online grocery platforms will be able to develop strategies that better understand consumer behavior and preferences via data analytics. More effective marketing and individualized services will result from this data-driven strategy.

India Online Grocery Market Trend Analysis

Trends
  • Integration with virtual assistants that respond to voice commands enables hands-free and practical voice-based purchasing.
  • Growing consumer preferences are reflected in the rising demand for health and wellness products, including gluten-free, organic, and products that promote immunity.
  • Increased emphasis on contactless shopping, including curbside pickup, contactless payments, and deliveries, to improve safety both during and after a pandemic.
  • Personalized promotions and AI-driven recommendations are employed to better adapt to individual interests and increase consumer loyalty.
  • To speed up deliveries and lower costs, online grocers are establishing more compact, automated fulfillment facilities close to their customers.
  • Retailers are converting their physical locations into "dark stores" for the fulfillment of online orders to improve inventory control and streamline processes.
  • Data analytics is being utilized to understand consumer behavior, allowing tailored advertising and inventory management for online grocery platforms.
Opportunities
  • Adding non-grocery items, such as electronics or home furnishings, to the product range can open up new revenue opportunities.
  • As the usage of digital technology continues to grow, untapped rural and semi-urban sectors present substantial potential opportunities.
  • Online grocery delivery services can increase the diversity of private labels they provide. Higher margins and unique product alternatives may be attainable with these house-branded goods.
  • Expanding the inventory of health and wellness products, including organic and dietary goods, is an achievable goal as public awareness of health issues rises.
  • Adopting subscription-based business models, such as regular grocery deliveries, can increase client retention and offer a steady income stream.
Challenges
  • Traditional Kirana stores, which are well-established in the neighborhood, could become an imminent risk if they start using online delivery services and providing specialized customer service.
  • Consumer preferences change quickly, and fickle loyalty might be problematic. Platforms need to be constantly modified to satisfy these changing needs.
  • The online grocery business is getting more and more congested, making it difficult for new competitors to establish themselves.
Nandini Roy Choudhury
Nandini Roy Choudhury

Principal Consultant

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Comparative View of Adjacent India Online Grocery Market

Future Market Insights (FMI) has compared two other markets, the Online Grocery Market and the India Loyalty Program Market. The table showcases each market’s estimated growth performance from 2023 to 2033. It highlights that the India Online Grocery Market is expanding at a significant CAGR but is still lower than the other two markets. The table showcases the intricate influence of each market on one another.

Technological developments are expected to play a vital role in the expansion of each market’s growth. Likewise, consumer preferences and tastes will influence each market market’s growth.

India Online Grocery Market:

Attributes India Online Grocery Market
CAGR (2023 to 2033) 7.8%
Market Value (2023) US$ 3.2 billion
Growth Factors
  • Increasing technological breakthroughs in the industry.
  • Expanding product offerings by providers.
  • Favorable government support initiatives like Digital India.
Future Opportunities Partnerships and collaborations with local retailers, farmers, and FMCG companies.
Market Trends Rising trend of online shopping among the young generation.

Online Grocery Market:

Attributes Online Grocery Market
CAGR (2023 to 2033) 23%
Market Value (2023) US$ 431.18 billion
Growth Factors
  • Expanding e-commerce businesses.
  • Rising smartphone and high-speed internet penetration across the world.
  • Growing demand for convenience and packaged foods.
Future Opportunities Increased automation in the grocery business.
Market Trends Emphasis on providing a supreme customer experience.

India Loyalty Program Market:

Attributes India Loyalty Program Market
CAGR (2023 to 2033) 15.7%
Market Value (2023) US$ 3,363.4 million
Growth Factors
  • Growing adoption in large-scale enterprises.
  • Rising demand for data-driven insights.
  • Increasing adoption of subscription-based models.
Future Opportunities Growth in contactless shopping.
Market Trends Rising establishment of micro-fulfillment centers.

Category-wise Insights

Snacks & Beverages Occupy Dominant Shares

Occupying nearly 28.90% of the India grocery market shares in 2023, snacks & beverages dominate over other product types.

Segment Snacks & Beverages
Market Share (2022) 28.90%

The term "snacks and beverages" refers to a broad category of commodities that includes everything from chips and soft drinks to nutritious snacks and specialized beverages. This diversity attracts a large consumer base with a variety of desires and preferences. Consumers may simply find their favorite brands and flavors on online platforms as they frequently provide a wide assortment of these products.

Online platforms give customers a place to post feedback and suggestions. As customers rely on the experiences of others, favorable reviews and word-of-mouth recommendations greatly impact how consumers decide which snacks and beverages to buy. These factors amplify the convenience factors, boosting this segment's sales.

Online Payment Methods Gain Traction with Ongoing Technological Advancements

Attaining nearly 67.9% of the India online grocery market sales, the online payment method is highly preferred by consumers.

Segment Online
Market Share (2022) 67.9%

To keep up with the mobile-first strategy used by online grocery platforms, many digital payment merchants have created user-friendly mobile apps for Indian e-grocery market. For users, these apps offer a practical and reliable experience. Digital payment platforms are appealing options for customers because they frequently include cashback benefits, discounts, and loyalty programs. With each transaction, users can get rewards, which encourages them to keep utilizing digital payment methods.

By eliminating the need to manage cash on delivery, the adoption of digital payments streamlines operations for online grocery companies. This lowers the possibility of errors, increases accountability, and boosts the effectiveness of all transactions. Online shopping becomes easier with digital payments. Customers can quickly make payments using their preferred ways, removing the inconvenience frequently connected with cash or credit card transactions. This conveniently infers that the online payment gateway market is essential for the thriving online grocery market in India.

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Region-wise Insights

North India Possesses a Robust Online Grocery Market in India

Due to its dense population and hectic lives, the National Capital Region (NCR), which includes Delhi and its satellite towns, has a thriving online grocery sector. There is a substantial presence of major players, including BigBasket, Grofers, and Amazon Fresh. While internet grocery shopping is expanding in Punjab and Haryana, traditional stores continue to dominate in some regions.

Bangalore, the capital of Karnataka, is a significant e-commerce center in South India, where online grocery shopping is very common. The online grocery business is expanding in Chennai, the capital of Tamil Nadu, especially in metropolitan areas. Hyderabad in Telangana has a thriving online grocery sector, and its tech-savvy populace embraces online shopping with open arms.

Mumbai, the capital of Maharashtra in West India, has a well-established online grocery sector that serves the metropolitan population through a combination of local and international firms. Online grocery shopping is expanding in Gujarati cities like Ahmedabad and Surat, yet traditional retail is still quite important.

Urban dwellers in Kolkata, West Bengal, and East India have embraced the convenience and savings offered by the development of various online grocery startups and established firms. Online grocery shopping is gradually gaining popularity in states like Odisha, Bihar, and Jharkhand, especially in metropolitan areas.

Competitive Landscape

With significant firms such as BigBasket, Grofers, Amazon Pantry, and Flipkart Supermart, the industry scenario of the online grocery industry is extremely competitive in India. Reliance JioMart, supported by Reliance Retail, is a noteworthy competitor. There are also local and regional platforms. Logistics and supply chain management present difficulties. Government laws have an impact on the dynamics of the market, and mergers and acquisitions are frequent.

Recent Developments:

  • Namdhari's Agro Fresh Pvt. Ltd, a high-end grocery store business, declared in July 2023 that it is seeking to raise between US$ 20 million and US$ 30 million as it tries to expand outside of South India.
  • BigBasket raised US$ 200 million in additional fundraising in December 2022, raising the company's worth of the Tata Digital-owned online supermarket to US$ 3.2 billion.
  • Other investors in the company, in addition to Tata Digital, which controls 64% of the Bengaluru-based business, took part in the investment round.

Key Companies in India Online Grocery Market

  • Amazon India Pvt. Ltd.
  • Godrej Nature’s Basket Ltd.
  • Grofers India Pvt. Ltd.
  • Paytm E0commerce Pvt. Ltd. (Paytm Mall)
  • Reliance Retail Ltd. (Reliance Fresh)
  • Spencer’s Retail
  • Supermarket Grocery Supplies Pvt. Ltd. (BigBasket)
  • UrDoorstep eRetail Pvt. Ltd.

India Online Grocery Market Segmentation

By Product Type:

  • Fresh Produce
  • Breakfast & Dairy
  • Snacks & Beverages
  • Meat & Seafood
  • Staples & Cooking Essentials
  • Others

By Payment Method:

  • Online
  • Offline (Cash on Delivery)

By Region:

  • South India
  • North India
  • East India
  • West India

Frequently Asked Questions

How Big is India Online Grocery Market?

India online grocery market size is valued at US$ 3.2 billion in 2023.

At What CAGR is the India Online Grocery Market Expanding?

India online grocery market is rising at a 7.8% CAGR through 2033.

What Will Be the India Online Grocery Market Size by 2033?

India online grocery market size will be worth US$ 6.8 billion by 2033.

What is the Leading Product Type in the India Online Grocery Market?

Snacks & beverages are the leading product type with 28.90% shares in 2023.

What is the Preferred Payment Method in the India Online Grocery Market?

Online payment methods dominate with 67.9% of the market shares in 2023.

Table of Content

1. Executive Summary

    1.1. India Market Outlook

    1.2. Demand-side Trends

    1.3. Supply-side Trends

    1.4. Technology Roadmap Analysis

    1.5. Analysis and Recommendations

2. Market Overview

    2.1. Market Coverage / Taxonomy

    2.2. Market Definition / Scope / Limitations

3. Market Background

    3.1. Market Dynamics

        3.1.1. Drivers

        3.1.2. Restraints

        3.1.3. Opportunity

        3.1.4. Trends

    3.2. Scenario Forecast

        3.2.1. Demand in Optimistic Scenario

        3.2.2. Demand in Likely Scenario

        3.2.3. Demand in Conservative Scenario

    3.3. Opportunity Map Analysis

    3.4. Investment Feasibility Matrix

    3.5. PESTLE and Porter’s Analysis

    3.6. Regulatory Landscape

        3.6.1. By Key States

        3.6.2. By Key Countries

    3.7. State Parent Market Outlook

4. Market Analysis 2018 to 2022 and Forecast, 2023 to 2033

    4.1. Historical Market Size Value (US$ Million) Analysis, 2018 to 2022

    4.2. Current and Future Market Size Value (US$ Million) Projections, 2023 to 2033

        4.2.1. Y-o-Y Growth Trend Analysis

        4.2.2. Absolute $ Opportunity Analysis

5. Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Product Type

    5.1. Introduction / Key Findings

    5.2. Historical Market Size Value (US$ Million) Analysis By Product Type, 2018 to 2022

    5.3. Current and Future Market Size Value (US$ Million) Analysis and Forecast By Product Type, 2023 to 2033

        5.3.1. Fresh Produce

        5.3.2. Breakfast & Dairy

        5.3.3. Snacks & Beverages

        5.3.4. Meat & Seafood

        5.3.5. Staples & Cooking Essentials

        5.3.6. Others

    5.4. Y-o-Y Growth Trend Analysis By Product Type, 2018 to 2022

    5.5. Absolute $ Opportunity Analysis By Product Type, 2023 to 2033

6. Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Payment Method

    6.1. Introduction / Key Findings

    6.2. Historical Market Size Value (US$ Million) Analysis By Payment Method, 2018 to 2022

    6.3. Current and Future Market Size Value (US$ Million) Analysis and Forecast By Payment Method, 2023 to 2033

        6.3.1. Online

        6.3.2. Offline (Cash on Delivery)

    6.4. Y-o-Y Growth Trend Analysis By Payment Method, 2018 to 2022

    6.5. Absolute $ Opportunity Analysis By Payment Method, 2023 to 2033

7. Key Country Market Analysis

    7.1. India

        7.1.1. Pricing Analysis

        7.1.2. Market Share Analysis, 2022

            7.1.2.1. By Product Type

            7.1.2.2. By Payment Method

8. Market Structure Analysis

    8.1. Competition Dashboard

    8.2. Competition Benchmarking

    8.3. Market Share Analysis of Top Players

        8.3.1. By State

        8.3.2. By Product Type

        8.3.3. By Payment Method

9. Competition Analysis

    9.1. Competition Deep Dive

        9.1.1. Amazon India Pvt. Ltd.

            9.1.1.1. Overview

            9.1.1.2. Product Portfolio

            9.1.1.3. Profitability by Market Segments

            9.1.1.4. Sales Footprint

            9.1.1.5. Strategy Overview

                9.1.1.5.1. Marketing Strategy

        9.1.2. Godrej Nature's Basket Ltd.

            9.1.2.1. Overview

            9.1.2.2. Product Portfolio

            9.1.2.3. Profitability by Market Segments

            9.1.2.4. Sales Footprint

            9.1.2.5. Strategy Overview

                9.1.2.5.1. Marketing Strategy

        9.1.3. Grofers India Pvt. Ltd.

            9.1.3.1. Overview

            9.1.3.2. Product Portfolio

            9.1.3.3. Profitability by Market Segments

            9.1.3.4. Sales Footprint

            9.1.3.5. Strategy Overview

                9.1.3.5.1. Marketing Strategy

        9.1.4. Paytm E-Commerce Pvt. Ltd. (Paytm Mall)

            9.1.4.1. Overview

            9.1.4.2. Product Portfolio

            9.1.4.3. Profitability by Market Segments

            9.1.4.4. Sales Footprint

            9.1.4.5. Strategy Overview

                9.1.4.5.1. Marketing Strategy

        9.1.5. Reliance Retail Ltd. (Reliance Fresh)

            9.1.5.1. Overview

            9.1.5.2. Product Portfolio

            9.1.5.3. Profitability by Market Segments

            9.1.5.4. Sales Footprint

            9.1.5.5. Strategy Overview

                9.1.5.5.1. Marketing Strategy

        9.1.6. Spencer's Retail

            9.1.6.1. Overview

            9.1.6.2. Product Portfolio

            9.1.6.3. Profitability by Market Segments

            9.1.6.4. Sales Footprint

            9.1.6.5. Strategy Overview

                9.1.6.5.1. Marketing Strategy

        9.1.7. Supermarket Grocery Supplies Pvt. Ltd. (BigBasket)

            9.1.7.1. Overview

            9.1.7.2. Product Portfolio

            9.1.7.3. Profitability by Market Segments

            9.1.7.4. Sales Footprint

            9.1.7.5. Strategy Overview

                9.1.7.5.1. Marketing Strategy

        9.1.8. UrDoorstep eRetail Pvt. Ltd.

            9.1.8.1. Overview

            9.1.8.2. Product Portfolio

            9.1.8.3. Profitability by Market Segments

            9.1.8.4. Sales Footprint

            9.1.8.5. Strategy Overview

                9.1.8.5.1. Marketing Strategy

        9.1.9. Blink Commerce Private Limited

            9.1.9.1. Overview

            9.1.9.2. Product Portfolio

            9.1.9.3. Profitability by Market Segments

            9.1.9.4. Sales Footprint

            9.1.9.5. Strategy Overview

                9.1.9.5.1. Marketing Strategy

        9.1.10. Aaram Shop Private Limited

            9.1.10.1. Overview

            9.1.10.2. Product Portfolio

            9.1.10.3. Profitability by Market Segments

            9.1.10.4. Sales Footprint

            9.1.10.5. Strategy Overview

                9.1.10.5.1. Marketing Strategy

10. Assumptions & Acronyms Used

11. Research Methodology

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List of Tables

Table 1: Market Value (US$ Million) Forecast by State, 2018 to 2033

Table 2: Market Value (US$ Million) Forecast by Product Type, 2018 to 2033

Table 3: Market Value (US$ Million) Forecast by Payment Method, 2018 to 2033
Nandini Roy Choudhury
Nandini Roy Choudhury

Principal Consultant

Talk to Analyst

Find your sweet spots for generating winning opportunities in this market.

List of Charts

Figure 1: Market Value (US$ Million) by Product Type, 2023 to 2033

Figure 2: Market Value (US$ Million) by Payment Method, 2023 to 2033

Figure 3: Market Value (US$ Million) by State, 2023 to 2033

Figure 4: Market Value (US$ Million) Analysis by State, 2018 to 2033

Figure 5: Market Value Share (%) and BPS Analysis by State, 2023 to 2033

Figure 6: Market Y-o-Y Growth (%) Projections by State, 2023 to 2033

Figure 7: Market Value (US$ Million) Analysis by Product Type, 2018 to 2033

Figure 8: Market Value Share (%) and BPS Analysis by Product Type, 2023 to 2033

Figure 9: Market Y-o-Y Growth (%) Projections by Product Type, 2023 to 2033

Figure 10: Market Value (US$ Million) Analysis by Payment Method, 2018 to 2033

Figure 11: Market Value Share (%) and BPS Analysis by Payment Method, 2023 to 2033

Figure 12: Market Y-o-Y Growth (%) Projections by Payment Method, 2023 to 2033

Figure 13: Market Attractiveness by Product Type, 2023 to 2033

Figure 14: Market Attractiveness by Payment Method, 2023 to 2033

Figure 15: Market Attractiveness by State, 2023 to 2033

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