Online Grocery Market Size By Category (Dairy & Breakfast Products, Fresh Produce, Snacks & Beverages, Meat & Seafood, Staple & Cooking Essentials), By Purchaser Type (One Time, Subscriber), By Delivery Type (Home Delivery, Click & Collect), By End-Use (Individual, Distributors), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026

Published Date: Nov 2020  |  Report ID: GMI4870  |  Authors: Preeti Wadhwani, Saloni Gankar

Report Format: PDF   |   Pages: 300   |   Base Year: 2019




Summary Table of Contents Industry Coverage Methodology

Industry Trends

Online Grocery Market size surpassed USD 190 billion in 2019 and will expand at around 28% CAGR between 2020 and 2026. Rising urbanization and the flourishing e-commerce sector in developing economies is a key factor driving the industry growth.
 

Online retailers are developing an efficient supply chain to reduce delivery timelines, which will positively influence the market expansion. Market players have observed a sudden increase in their quarterly revenue in FY2020 due to the temporary closure of several brick & mortar grocery stores. In April 2020, BigBasket, an online grocery store in India, reported 84% growth in the number of new customers compared to pre-COVID-19, while the retention rate grew by 60%. Consumers have shifted their preference to e-grocery stores to purchase necessary goods.
 

Online Grocery Market

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Changing consumer behavior related to grocery shopping has encouraged market leaders to offer a cost-effective online experience, thus increasing their offerings and customer loyalty. However, diminishing inventory & restock ability and the lack of operational manufacturing facilities may limit market expansion in the forecast period.
 

Online Grocery Market Report Coverage
Report Coverage Details
Base Year: 2019 Market Size in 2019: USD 190 billion
Historical Data for: 2016 to 2019 Forecast Period: 2020 to 2026
Forecast Period 2020 to 2026 CAGR: 28% 2026 Value Projection: USD 1 trillion
Pages: 300 Tables, Charts & Figures: 298
Geographies covered (18): U.S., Canada, UK, Germany, France, Italy, Spain, Russia, China, India, Japan, South Korea, South East Asia, Brazil, Mexico, Argentina, GCC, South Africa
Segments covered: Purchaser Type, Category, Delivery Type, End-Use and Region
Companies covered (20): Aldi, Alibaba Group, Amazon.com Inc., Avenue Supermarts Ltd., Carrefour S.A., Costco Wholesale Corporation, Edeka Group, Fresh Direct LLC, Grofers India Pvt. Ltd., Honestbee, Instacart, JD.Com, Peapod LLC, Publix Super Markets Inc., Safeway Inc., Supermarket Grocery Supplies Pvt Ltd, Target Corporation, Tesco PLC, The Kroger Co., Walmart Inc.
Growth Drivers:
  • Attractive marketing strategy and promotional activities by key players
  • Emerging technology such as voice assistance and delivery robots in North America
  • Adoption of robust business model by market leaders to target small towns in Europe
  • Rising demand for fiction free shopping in Asia Pacific
  • Growing investments to develop e-commerce industry in Latin America and MEA
Pitfalls & Challenges:
  • Management of perishable groceries
  • High operating costs

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The growing demand for fresh groceries in the UK

The fresh produce segment in the UK online grocery market is projected to observe more than 32% CAGR through 2026. Around 40% of consumers in the country have tried online shopping with home delivery for fresh groceries. The convenience and easy accessibility to high-quality fresh produce are the key considerations among consumers for choosing online grocery stores. This has encouraged industry players to develop differentiated business models to improve customer satisfaction and remain competitive in the market.
 

With the ongoing COVID-19 pandemic, leading grocery retailers in the UK are expanding their delivery capacity to fulfill the growing demand of consumers. For instance, in September 2020, J Sainsbury PLC included 1,000 additional online delivery vans to handle 700,000 online grocery orders in a week. Other retailers, such as Tesco PLC, Asda Stores Ltd., and Morrisons, have expanded delivery times to serve more customers and increase market share in the short-term.
 

Cost-effectiveness and convenience in picking up online grocery will propel the click & collect delivery type segment growth

The click & collect model has become a prerequisite for shoppers demanding convenience in picking up their goods. The model involves consumers ordering products online and then picking them up at a pre-determined location. According to Doddle Parcel Services Ltd., in March 2019, out of 2,000 U.S. consumers surveyed, 68% preferred click & collect delivery method due to faster and cheaper access to orders. The click & collect method provides complete control to the consumers over the delivery of their products along with the provision of various options for collection, fulfillment, and eliminating unprofessional delivery services.
 

Cost-effectiveness is another primary factor for the adoption of the click & collect model among consumers as it offers zero or minimal added delivery costs. It enables consumers to check the quality of the product, pick up orders at their convenience, and save shipping costs. The model has also been beneficial to retailers, helping them to eliminate the need of hiring delivery persons or renting vehicles, and pay a one-time cost to set up the click & collect system.
 

Retailers adopting a subscription-based purchase model will boost the India online grocery market size

India Online Grocery Market Size

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The subscription-based purchase model segment is poised to register a growth of above 30% during 2020 to 2026. Subscription model allows customers to purchase groceries without any interruption and receive a specific product regularly. The benefit of flexibility and anytime cancellation provides easy opt-in and opt-out options to consumers. It also allows consumers to receive home deliveries at a specific period without paying additional delivery charges. Industry leaders are increasingly adopting the subscription-based delivery service model to drive market revenue and enable flexible billing options.
 

Changing consumer grocery shopping behavior during the COVID-19 pandemic will spur the individual end use segment share

The unprecedented outbreak of COVID-19 has emerged as a major factor for individuals shifting from brick and mortar stores to online grocery stores. According to a survey by Chicory, a New York-based digital shopper marketing platform, in October 2020, there were 18% more online grocery users compared to pre-COVID times. Consumers in Mexico, India, Brazil, Indonesia, and China have made a significant shift to online shopping during the pandemic.
 

In 2019, individual users in the Canada online grocery market accounted for over 65% of the regional revenue share. Consumers transitioning is compelling grocers to focus on improving their business strategies. In November 2020, Loblaw Companies Limited, a Canadian food retailer, announced the use of self-driving box trucks to quickly deliver online grocery orders to customers in Toronto by January 2021. This will enable the company to frequently move goods from automated picking facilities and keep pace with online grocery orders, making the supply chain more efficient across Toronto.
 

Growing concerns regarding the spread of COVID-19 will propel the demand for purchasing groceries online across Europe

Europe Online Grocery Market Share

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Europe online grocery market accounted for more than 30% share in 2019. The presence of leading retail grocery chains and the growing popularity of online shopping in countries such as the UK, Germany, Spain, France, and Italy are driving the regional market revenue. The COVID-19 pandemic is providing a significant short-term boost to the market in the region.
 

According to Waitrose & Partners, a brand of supermarkets, out of 2,000 consumers in the UK, 60% have shopped online for groceries since the pandemic with 40% citing convenience as the primary reason. Similarly, in August 2020, Tesco PLC, one of the largest supermarket chains in the UK, witnessed an 8.7% growth in online grocery sales in the first quarter of 2020.
 

Furthermore, the increasing focus of government administrations & financial organizations on promoting the usage of digital payment methods to contain the virus spread is fuelling the online grocery market statistics.
 

Presence of several participants leading to industry consolidation

The industry is highly competitive with the presence of multiple small and large players across the globe. Market participants are engaged in acquisitions and partnerships to gain a competitive edge on other companies through expansion in new territories.
 

The key players operating in the online grocery market include Koninklijke Ahold Delhaize N.V., mySupermarket Limited, AmazonFresh, LLC, Safeway, Inc., NetGrocer.com, Inc., My Brands Inc., ShopFoodEx, Fresh Direct, LLC, Schwan Food Company, and Walmart Stores, Inc. These companies are investing in R&D activities to adopt innovative technologies and speed up delivery time for customers.
 

This market research report on online grocery includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2016 to 2026 for the following segments:
 

Market, By Category

  • Dairy and breakfast products
  • Fresh Produce
  • Snacks and beverages
  • Meat and seafood
  • Staple and cooking essentials
  • Others

Market, By Purchaser Type

  • One Time
  • Subscriber

Market, By Delivery Type

  • Home delivery
  • Click and collect

Market, By End-Use

  • Individual
  • Distributors

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Russia
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • South East Asia
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • MEA
    • GCC
    • South Africa
       

Frequently Asked Questions (FAQ) :

The global market share for online grocery exceeded USD 190 billion in 2019 and is set to grow at nearly 28% CAGR through 2026 with rising urbanization and thriving e-commerce sector in developing economies.
Owing to the convenience and easy accessibility to high-quality fresh groceries, the UK online grocery market revenue from the fresh produce segment is anticipated to record over 32% CAGR through 2026.
The Europe online grocery industry held over 30% share in 2019 and will gain substantial growth due to the presence of leading retail grocery chains and the recent concerns about the COVID-19 pandemic.
The market share of subscription based purchase options will expand at nearly 30% CAGR through 2026 owing to benefits like flexibility, scheduled home deliveries, and easy cancellation.

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Premium Report Details

  • Published Date: Nov 2020
  • Pages: 300
  • Tables: 268
  • Charts / Figures: 30
  • Companies covered: 20
  • Countries covered: 18

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