Online Grocery Market in India by Product, and Type - - Forecast and Analysis 2023-2027

The online grocery market in India is estimated to grow at a CAGR of 20.33% between 2022 and 2027. The size of the market is forecast to increase by USD 7,417.46 million. The growth of the market depends on several factors, including increased popularity and rise in e-commerce platforms, rise in disposable income among consumers in India, and rapid growth in m-commerce. 

This report extensively covers market segmentation by product (food products and non-food products), and type (online and cash on delivery). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

What will be the size of the Online Grocery Market in India During the Forecast Period?

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Online Grocery Market in India: Key Drivers, Trends, Challenges, and Customer Landscape

The rapid growth in m-commerce is notably driving the market growth, although factors such as huge competition from offline retail stores may impede the market growth. Our researchers analyzed the data with 2022 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.

Key India Online Grocery Market Driver

The rapid growth in m-commerce is notably driving market growth. Apart from the growth in online web-based retail services, the online grocery market in India has also witnessed an increase in the adoption of mobile-based (or app-based) services or m-commerce. The growth in m-commerce is mostly attributed to the increased penetration of smartphones in India. Using mobile apps, consumers can shop from anywhere and in any situation, even when traveling. 

The penetration of e-commerce is high in Indian metropolitan cities, including Mumbai, Delhi, Hyderabad, Bangalore, and in other places owing to the high adoption and use of laptops and desktops, which offers a high growth opportunity to online retailers due to the increasing demand for and use of m-commerce. Moreover, the popularity of m-commerce has motivated offline stores and e-commerce players to switch to these platforms. These factors are expected to drive the growth of the market in India during the forecast period.

Significant India Online Grocery Market Trend

The growth in demand for functional foods and beverages is an emerging trend in the market. The growing prevalence of obesity and other health conditions is encouraging health-conscious consumers to opt for food and beverage products that have various functional benefits. Consumers are ready to pay a premium price for products offering various functional and several other health-promoting benefits, such as reduced fat.

However, these products are not available in local grocery stores and even in large-scale supermarkets and hypermarkets. Vendors in the market are offering new products on their e-commerce platforms that are rich in nutrients and antioxidants and cater to the changing demands of consumers. A large number of functional foods and beverages are available in the market, owing to the increasing product launches by prominent brands and increasing consumer demand for these products. E-commerce platforms collaborate with these local and international brands and make these products available to consumers through their online platforms. Hence, such factors will drive the growth of the market in India during the forecast period.

Major India Online Grocery Market Challenge

The huge competition from offline retail stores is a major challenge impeding market growth. Offline grocery and brick-and-mortar retail stores, especially unorganized grocery retailers that mostly establish their shops in residential areas, are the major competitors of online grocery delivery service providers. In developing countries such as India, unorganized neighborhood grocery retailers offer various offers, services, and discounts to their customers. The services include the exchange of products that do not meet customers' expectations and free delivery at doorsteps.

Brick-and-mortar stores nowadays are switching to omnichannel retail strategies to compete with e-commerce players. They offer grocery ordering services through mobile apps and phone calls. They are also installing advanced sensors and maintaining customers' details along with their buying behavior and purchasing patterns to provide attractive offers and services to their customers. All these factors deter the growth of the market in India during the forecast period.

Key India Online Grocery Market Customer Landscape

The 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 growth strategies.

Global Online Grocery Market in India Customer Landscape

Who are the Major Online Grocery Market Vendors in India?

Vendors 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.

Avenue Ecommerce Ltd. - The company offers grocery, cookware and serve ware, fruits and vegetables, and kitchen appliances which one can order online or visit their stores located in several Tier 1 and Tier 2 cities in India. The key offerings of the company include online groceries. 

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:

• Amazon.com Inc.
• B.L. Agro Industries Ltd.
• Blink Commerce Pvt. Ltd.
• Brisam Retail Pvt. Ltd.
• Dookan Technologies s.r.o
• Dunzo Digital Pvt. Ltd.
• Flipkart Internet Pvt. Ltd.
• Flora foods
• Fresh to Home
• Heritage Foods Ltd.
• Innovative Retail Concepts Pvt. Ltd.
• One97 Communications Ltd.
• Reliance Industries Ltd.
• RP Sanjiv Goenka Group
• Satvika Bio Foods India Pvt. Ltd.

Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

What is the Fastest-Growing Segment in the Online Grocery Market in India?

The market share growth by the food products segment will be significant during the forecast period. The grocery food products segment contributes substantially to the revenue generated from the retail sales of groceries through online channels. The products included in the food products segment are consumed on a regular basis, and they have shorter shelf lives than those in the non-food products segment. 

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The food products segment was valued at USD 734.55 million in 2017 and continued to grow until 2021. Consumers prefer online retail channels over brick-and-mortar stores for shopping for food products due to factors like options for customization and personalization, availability of high-quality food products, swift delivery processes and integrated return policies, and a wide range of products and brands to select from. In addition, the presence of various leading global packaged food and beverage producers, such as Nestle S.A (Nestle), PepsiCo Inc (PepsiCo), Mars Inc. (Mars), Coca-Cola Co (Coca-Cola), and several others on online retail channels, both through their own websites as well as through third-party online retailers, encourage consumers in India to shop for food products online. Moreover, omnichannel marketing of products also enables packaged food and beverage players to attract consumers and increase the sales of food products.  Hence, such factors are expected to boost the growth of the segment during the forecast period.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Outlook (USD Million, 2017 - 2027)
  • Food products
  • Non-food products

• Type Outlook (USD Million, 2017 - 2027)
  • Online
  • Cash on delivery

Parent Market Analysis

Technavio categorizes the online grocery market in India as a part of the global Internet and direct marketing retail market within the global retailing market. The parent global Internet and direct marketing retail market cover the revenue generated by companies providing retail services primarily on the Internet, through mail orders, door-to-door retailers, and television (TV) home shopping retailers.  Our research report has extensively covered external factors influencing the parent market growth during the forecast period.

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What are the Key Data Covered in this Online Grocery Market in India In Country Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the online grocery market in India between 2023 and 2027
• Precise estimation of the size of the online grocery market in India size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across India
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of the online grocery market in India vendors

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