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The online grocery market size is projected to grow by USD 1,653.7 billion with a CAGR of 21.48% between 2023 and 2028. The market's trajectory and trends are intricately tied to various factors, foremost among them being the burgeoning preference for grocery purchases and the widespread adoption of e-commerce platforms. The rapid surge in e-commerce, coupled with the surging demand for swift grocery delivery services, further fuels this growth. Online payments and discounts attract a growing base of tech-savvy consumers seeking wide product selections, including organic and locally sourced groceries. This landscape is characterized by the convenience of home-based shopping and doorstep delivery of groceries. Online platforms offer a vast array of products, including fresh produce, pantry essentials, and ready-to-eat meals. These items are stored in warehouses, ensuring their safety and freshness, and contributing to the overall convenience and appeal of online grocery shopping experiences.
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The market is driven by the rapid adoption of digital platforms, offering convenience and time-saving benefits to consumers. Innovations like artificial intelligence (AI) and machine learning (ML) optimize operations, enhancing delivery options such as contactless methods and drone deliveries. Challenges include supply chain management complexities to maintain freshness and ensure customer fulfillment centers meet increasing demand amid urbanization trends.
The rapid growth in e-commerce is the key factor driving the growth of the global market. Apart from the growth in online web-based retail services, the global market has also witnessed an increase in the adoption of mobile-based (or app-based) services or m-commerce. This growth in m-commerce is mostly due to the increased penetration of smartphones globally. The intensifying competition within the global market has spurred innovative approaches to offer expedited delivery services, particularly for fresh produce, pantry staples, breakfast choices, and shopping cart essentials.
From bustling cities to suburban neighborhoods, deliveries of various brands and product types, including breakfast essentials, redefine accessibility. Online platforms offer a wider selection of products, including specialty items, fresh fruits, organic produce, and international brands, catering to a diverse number of consumers variety. Additionally, deals prompt increased purchases, driving higher sales volumes as customers explore additional items or categories due to the attractive incentives. These are fresh and direct add-to-the-shopping cart and checkout features that drive the market growth and trends during the forecast period.
The demand for functional food and beverages is growing rapidly number among consumers worldwide due to health benefits such as enhanced immunity, improved mental strength, improved heart rate, improved digestive health, hydration and electrolyte-replenishing benefits, and better intestinal flora and gut function. Further, a number of consumers are spending more on non-traditional fitness activities, such as yoga and aerobics, and thus, prefer to consume functional food and beverages as a healthy source of nutrition. This growing need and aspiration of customers regarding functional food are further propelling its demand across the globe.
As all these functional food and beverage products are not readily available at brick-and-mortar retail stores, supermarket and hypermarket consumers must buy them online. companies of functional food and beverages are also marketing their products with the help of effective labeling and product formulation. The stores and grocery delivery service providers are showcasing and offering these products to widen their product portfolios to capture more share in the market during the forecast period.
The huge competition from offline retail stores is a major challenge to the growth of the global market. Offline grocers and brick-and-mortar stores, especially unorganized nearby grocery retailers, are major competitors of online grocery delivery service providers. In developing countries, such as India, unorganized nearby grocery retailers offer various offers, services, and discounts to their customers. The services include the exchange of products that do not meet customer expectations and free delivery at doorsteps. The online delivery service players find it difficult to compete with brick-and-mortar grocery sellers as, in developing countries, a number of consumers are price-sensitive and are very concerned about the way goods are delivered to them.
Another major reason is ensuring the freshness and quality of perishable items like fruits, vegetables, and meats throughout the supply chain. Managing the short shelf life of fresh products demands meticulous pantry control while meeting the demand and order of several consumers.
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The food products segment was valued at USD 278.50 billion in 2018. In this segment, the presence of various leading global packaged foods and beverages products, such as Nestle, Danone, PepsiCo, Mars, Coca-Cola, Kraft-Heinz, Abbott, and Mondelez, in the online retail channels through their own websites as well as through third-party online retailers encourage a number of consumers to shop grocery food item online. Moreover, omnichannel marketing for product displays also enables packaged food and beverage players to attract consumers and increase the sales of grocery food products. In addition, market companies have witnessed a rise in revenue due to the increasing demand for food items through online retail channels. Such instances are expected to boost segment growth during the forecast period.
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In supermarkets, customers have immediate access to products, allowing them to physically inspect. Shopping in supermarkets provides a sensory experience, allowing customers to touch, feel, and select fresh produce and groceries according to their preferences. While in digital media is different from supermarkets but has a virtual online connection with fresh groceries and vegetables. Hence, such factors are driving the regional market growth during the forecast period.
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.
Albertsons Companies Inc. - The company offers fresh produce grocery products, meat, seafood, general merchandise, health and beauty care products, households, pharmacy, fuel, and other items and services.
The market analysis and report forecasts detailed analyses of the competitive landscape, bands of the market, and information about 15 market players, including:
The market growth analysis report predicts rapid growth due to urbanization trends, especially notable in cities like San Francisco and Los Angeles. Latin America and South Korea also witness increased digitalization in grocery sales, offering a diverse selection of meals, including seafood, while prioritizing safety in warehouses.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market is experiencing significant growth, driven by various factors such as online payments, contactless delivery, and a plethora of delivery options. Small-scale grocers and third-party service providers play crucial roles in facilitating this market's expansion, alongside food-delivery platforms that offer time slots and flexible delivery options. Consumers benefit from click and collect services, ensuring a seamless experience. The rise of digital platforms enables access to a wide product selection, including staples and cooking essentials, breakfast and dairy items, and even specialty products and international goods.
Further, this market leverages e-commerce technology, logistics, and user-friendly interfaces to provide a streamlined shopping experience, ultimately enhancing customer satisfaction and fostering customer loyalty through exclusive benefits like free deliveries, special discounts, and personalized recommendations. The integration of AI and ML further optimizes supply chain management and demand forecasting, ensuring efficient route optimization and inventory management for a seamless shopping experience.
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Market Scope |
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Report Coverage |
Details |
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Page number |
170 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 21.48% |
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Market Growth 2024-2028 |
USD 1,653.7 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
17.41 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 66% |
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Key countries |
China, US, UK, Japan, and France |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Albertsons Companies Inc., Amazon.com Inc., Blink Commerce Pvt. Ltd., Bundl Technologies Pvt. Ltd., Coles Group Ltd., Costco Wholesale Corp., Flipkart Internet Pvt. Ltd., HOFER KG, Innovative Retail Concepts Pvt. Ltd., Koninklijke Ahold Delhaize NV, Ocado Group Plc, Rakuten Group Inc., Reliance Industries Ltd., Seven and i Holdings Co., Ltd., SPAR International, Target Corp., Tesco Plc, Transform Holdco LLC, Walmart Inc., and Woolworths Group Ltd. |
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Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
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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 Product
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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