Online Grocery Market Size

Online Grocery Market Size

Online Grocery Market size surpassed USD 190 billion in 2019 and is estimated to 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.

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Online retailers are developing an efficient supply chain to reduce delivery timelines, which will positively influence the market demand. For instance, in June 2020, Paytm Mall, an e-commerce firm, announced its plan to implement same-day hyperlocal delivery of groceries to diversify its offerings to customers. The strategy has enabled it to deliver grocery essentials quickly to consumers in Tier-II and Tier-III cities across India during the COVID-19 lockdown period.

Online grocery market players have observed a sudden increase in their quarterly revenue in FY2020 on account of 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 around 60%.

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