The global online grocery market size is expected to reach USD 1.1 trillion by 2027, progressing at a substantial CAGR of 24.8% from 2020 to 2027. With the continued shift in consumer lifestyle and hectic work schedules, as well as the continued growth in the working population, online grocery platforms have witnessed substantial revenue growth. Further, the increased smartphone penetration coupled with the introduction of innovative functions in online grocery apps is anticipated to boost the market growth over the forecast period.
Grocery shopping online has multiple advantages, such as convenience to order from home, integration of coupons and discounts, as well as quick home delivery. Issues such as the quality of the produce impeded market growth in the early years; however, the adoption of IoT and AI functionalities have mitigated such issues. IoT helps e-commerce organizations maintain inventory by using IoT enabled devices within the network. IoT provides real-time data and helps retailers analyze the demand for several products in different regions. The current outbreak of COVID-19 has offered numerous opportunities to big and small market players to increase their footprint through good quality products, exciting offers, convenient user interface, and efficient delivery.
Developing economies such as India, China, and Brazil have witnessed a substantial rise in the number of online shoppers over the past few years. For instance, as per the India Brand Equity Foundation (IBEF), the number of online shoppers in the country was around 120 million in 2018 and is estimated to reach 220 million by 2025. This growing trend and surge in the number of shoppers have developed a huge potential for market growth. The online grocery industry has been segmented majorly on the basis of products into fresh produce, breakfast and dairy, meat and seafood, snacks and beverages, and staples and cooking essentials, among others, with the staples and cooking essentials segment spearheading market growth.
Further key findings from the study suggest:
· With regards to the product, the fresh produce segment is expected to advance at a CAGR of over 22.0% through 2027 owing to the increasing adoption of e-commerce platforms for buying fruits, vegetables, and other grocery items.
·The breakfast and dairy segment is projected to advance at approximately 24% CAGR through the forecast period, owing to high demand for products like dairy and curd, coupled with their short shelf life, which necessitates repeated buys.
· Asia Pacific is estimated to advance at the fastest CAGR of over 27% from 2020 to 2027, owing to the rising younger population in the region that is more inclined toward online grocery buying, as well as government initiatives to promote digitization and e-commerce environments.
· The coronavirus pandemic has caused people to turn towards online grocery delivery platforms, as a way to respect social distancing norms and avoid physical contact. For example, a Japan Times report in July 2020 reported that online sales constituted around 5% of the overall grocery sales in the country, with the number being 2.5% in the pre-pandemic period.
·The market is characterized by high competition with the presence of global players such as Walmart; Amazon.com, Inc.; JD.com, Inc.; and Rakuten.
·The key players in the online grocery market are opting for strategies such as acquisitions, mergers, and collaborations to expand their regional presence in the market, as well as offering an optimal experience to customers. For example, Walmart launched the ‘Walmart+’ membership program in September 2020, with initial features including unlimited free delivery, and Scan & Go.
·In another development, Walmart agreed to sell most of its shares in the Japanese supermarket chain Seiyu to KKR and Rakuten in November 2020. Rakuten had earlier launched an online grocery delivery service known as Rakuten Seiyu Netsuper in 2018
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Grand View Research has segmented the global online grocery market on the basis of product type and region:
Online Grocery Product Type Outlook (Revenue, USD Billion, 2016 – 2027)
Breakfast & Dairy
Snacks & Beverages
Meat & Seafood
Staples & Cooking Essentials
Online Grocery Regional Outlook (Revenue, USD Billion, 2016 – 2027)
Middle East & Africa
List of Key Players of Online Grocery Market
• JD.com, Inc.
• Amazon.com, Inc.
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