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The online grocery delivery services market size is forecast to increase by USD 1,120.4 billion at a CAGR of 25.2% between 2023 and 2028. The market is experiencing significant growth due to several key trends. The increased popularity and adoption of e-commerce platforms have made online shopping more convenient for consumers, leading to a rise in demand for grocery delivery services. Additionally, the growth in demand for functional foods and beverages has created a new opportunity for online grocery retailers, as consumers seek out healthier options that can be easily delivered to their doors. End-users are also increasingly perceiving online grocery shopping as a time-saving and convenient solution to their weekly grocery needs. These factors are driving market growth and are expected to continue shaping the market in the coming years.
The market is experiencing significant growth due to the increasing digitization of consumer behavior and the convenience it offers. The macro-economic environment, including urbanization and rising per capita expenses, is driving the demand for household & grocery items through e-commerce channels. Consumers, particularly those in economic areas, are increasingly price-conscious and prefer the full basket-offerings provided by online retailers. Logistics and warehouses play a crucial role in the success of online grocery delivery services. Traditional grocery retailers are investing in advanced solutions, such as automated warehouses and delivery robots, to streamline operations and meet the growing demand. The use of mobile applications and smart mobiles has made online shopping more accessible, enabling consumers to place orders from anywhere at any time.
Furthermore, current trends in the market include the rise of meal kits and customized offerings. Macroeconomic factors, such as disposable income and discretionary spending, will continue to influence consumer behavior. Anticipated future changes include the expansion of international producers and suppliers in the market, as well as the integration of artificial intelligence and machine learning to improve the customer experience. The current situation presents both opportunities and challenges for players in the market, with future prospects looking promising for those who can effectively adapt to the changing landscape.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The individuals segment is estimated to witness significant growth during the forecast period. The market caters primarily to affluent consumers seeking convenience and ease in their daily lives. Home delivery through apps and websites has gained significant traction, particularly in economic areas undergoing rapid urbanization and digitization. Fruits & vegetables, dairy products, fresh produces, frozen foods, staple foods, and cooking essentials are popular categories witnessing increased demand. The industry has faced turbulence due to current trends, including the adoption of smartphones and internet usage, which have led to extended working hours and traffic jams. Anticipated future changes, such as developing technology, new laws, and rising investment requirements, are shaping the industry's landscape. Significant industry players are focusing on expansion strategies, including partnerships with international producers and suppliers, to cater to the growing demand.
Furthermore, online grocery retailers offer user-friendly features, such as improved websites and mobile application designs, faster delivery times, and improved logistics, making shopping more convenient for individuals. The convenience of door delivery, easy access, and payment options are driving the growth of the market. Furthermore, the integration of meal planners, detailed product descriptions, and subscription plans provide additional benefits, saving time and effort while ensuring the availability of good-quality products. These factors collectively contribute to the market's growth, with individuals remaining the largest segment during the forecast period.
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The Individuals segment was valued at USD 208.50 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 57% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market is witnessing significant growth due to the increasing affluence of consumers and the convenience of home delivery. Apps and websites have revolutionized the way people shop for essentials, including fruits & vegetables, dairy products, fresh produce, frozen foods, staple foods, and cooking essentials. The industry has faced turmoil in the current situation due to economic areas and traffic jams, extended working hours, and the adoption of smartphones and internet usage. Current trends indicate rapid digitization and urbanization, leading to anticipated future changes such as improved websites, mobile application design, faster delivery times, and improved logistics. Significant industry players are expanding their reach through strategic partnerships with international producers and suppliers.
Furthermore, new laws and regulations are shaping the market, with a focus on user-friendly features, payment options, and door delivery for easy access. The revenue share of online grocery retailers is expected to rise as the industry adapts to the needs of consumers, offering a seamless shopping experience. Rising investment requirements and developing technology are key drivers of growth in this dynamic market.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increased popularity and adoption of e-commerce platforms is the a key driver of the market. The online grocery delivery market has experienced significant growth in recent years, driven by the increasing use of mobile apps and multiple channels for shopping. This trend is particularly notable in urban areas, where consumers value convenient delivery options and the ability to shop for fresh food and staple meals from the comfort of their homes. Retailers have responded by expanding their product offerings to include a wider range of fresh food items, such as meat and seafood, to meet the demands of individual consumers. The COVID-19 pandemic has further accelerated this trend, as social distancing measures have made physical stores less appealing to many shoppers.
Furthermore, analysts predict that the convenience and time-saving benefits of online grocery delivery services will continue to drive growth in this market, even as social distancing measures are lifted. The customer experience is a key differentiator in this market, with retailers focusing on ensuring the quality and freshness of their offerings to meet the evolving needs and preferences of consumers.
The growth in demand for functional foods and beverages is the upcoming trend in the market. The online grocery delivery market is witnessing significant growth due to the increasing preference for convenient and time-saving options among individual consumers. With the advent of mobile apps and multiple channels, retailers are expanding their customer base beyond physical stores. The demand for fresh food, quality, and freshness, particularly in staple meals such as meat and seafood, is driving this trend. Social distancing measures and the need for contactless shopping have further accelerated the adoption of online grocery delivery services. Analysts predict that this trend will continue as consumers seek to maintain their staple meal routines while adhering to health and safety guidelines.
Furthermore, functional foods and beverages, which offer health benefits such as enhanced immune system, improved mental strength, and better digestive health, are gaining popularity among consumers. As these products are not readily available in physical stores, online platforms provide a convenient solution for consumers to access a wider range of product offerings.
The end-user perception of online grocery shopping is a key challenge affecting the market growth. The market is witnessing significant growth, driven by the increasing preference for convenient and time-saving options among individual consumers. However, expanding the customer base beyond tech-savvy consumers remains a challenge. Grocery retailers are leveraging multiple channels, including mobile apps, to offer wider access to their product offerings. End-users prioritize fresh food and quality, especially for perishable items like meat and seafood, staple foods, and ingredients for staple meals. The shift towards social distancing due to the ongoing pandemic has further accentuated the demand for online grocery delivery services. Despite these advantages, end-users' perception of online grocery shopping is yet to change fully.
Furthermore, the concern for product quality and freshness, which is crucial for groceries, continues to be a significant barrier. Enhancing the customer experience through seamless delivery options and ensuring the freshness and quality of products are key areas for vendors to focus on to gain end-user trust and loyalty.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Target Corp. - The company offers online grocery delivery services for dairy, deli, snacks, and breakfast cereal.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is experiencing significant growth due to the increasing logistics capabilities and the expansion of warehouses to meet the demands of customers. In the macroeconomic environment, consumers, particularly those who are price-conscious and prioritize discretionary spending, are turning to online platforms for full basket-offerings, including meal kits and quick commerce offerings from convenience stores. Key market indicators, such as user metrics from survey results, show that B2C enterprises are gaining traction, with Meituan leading the charge in China. Country-specific associations and GDP per capita, internet connection speed, and urban population are crucial factors driving this growth.
Furthermore, forecasting techniques, such as the S-curve function and exponential trend smoothing, indicate an internet user base of over 4.6 billion and a growing urban population. The digitization of the grocery industry, fueled by the internet, smart mobiles, and macro-economic factors like per capita expenses and urbanization, is leading to increased investments in advanced solutions, including mobile applications, user-friendly websites, and advanced logistics systems. The coronavirus pandemic has further accelerated this trend, with profit margins in the food and groceries sector expected to remain strong.
Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 25.2% |
Market growth 2024-2028 |
USD 1,120.4 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
19.77 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 57% |
Key countries |
China, UK, US, Japan, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Albertsons Companies Inc., Alibaba Group Holding Ltd., Amazon.com Inc., Blink Commerce Pvt. Ltd., Brandless, Carrefour SA, Coles Group Ltd., Costco Wholesale Corp., Flipkart Internet Pvt. Ltd., HOFER KG, Innovative Retail Concepts Pvt. Ltd., Maplebear Inc., METRO Cash and Carry India Pvt. Ltd., Ocado Group Plc, Rakuten Group Inc., SPAR International, Target Corp., Tesco Plc, The Stop and Shop Supermarket LLC, and Walmart Inc. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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