India Online Grocery Market Analysis By Product and Region

Posted by Ryan Shaw on March 22nd, 2021

The India online grocery market size is projected to reach USD 38.9 billion by 2028, according to a study conducted by Grand View Research, Inc. It is expected to expand at a CAGR of 37.1% from 2021 to 2028. The online grocery market in India has been thriving with consumers favoring the convenience of online shopping over neighborhood grocery retailers. Amid the COVID-19 pandemic, people have been careful to step out from the safety of their homes.

A rising number of individuals are shifting toward online grocery shopping for meeting their needs during the time of social distancing. The online grocery market in India, while still in its nascent stage, witnessed remarkable growth during the pandemic period and is set to pick up significantly as social distancing becomes the new normal and as traditional grocery retailing loses appeal across hitherto experience. Additionally, growing smartphone usage, coupled with the proliferation of the internet, is a key factor expected to boost market growth over the forecast period.

Furthermore, a rise in investments of Venture Capital and Private Equity (PE) funds into India's consumer internet and online retail sectors are likely to support the growth of the market. Moreover, in the coming years, the industry is expected to be driven by consumers using local languages over English from Tier-I as well as Tier-II and III cities. Hence, key players in the market are looking forward to adapting their platforms to local languages and establish improved voice search features to build their potential consumer base. Other appealing offers like fast delivery or same-day delivery, low delivery charges, cashback offers, and flexible return policies by online grocery platforms are also expected to drive the market in the foreseeable future.

Online grocery shopping is seen to be highly convenient and user-friendly; however, it has its challenges. A personalized experience, lack of physical evidence, and checking the product for its freshness before the purchase is absent while shopping online. The growing awareness of fitness and well-being, eating fresh and healthy food raises concerns about buying groceries online. Moreover, frauds associated while making an online purchase and payments, delays in the delivery, and delivery of damaged or expired goods are some of the other factors that are likely to hinder the market growth. Nevertheless, the adoption of the Internet of Things (IoT) is projected to provide lucrative opportunities for the market over the forecast period. IoT aids e-commerce companies keep track of their inventory with the use of IoT enabled devices within the network. These IoT-enabled devices help retailers provide real-time data and analyze the demand for several products across different regions and cities.

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India Online Grocery Market Report Highlights

  • Based on product type, the staples and cooking essentials segment dominated the market with a share of 33.9% in 2020 owing to the constant shopping of staples
  • The online payment method segment is expected to expand at the fastest CAGR over the forecast period. India’s online grocery market, traditionally dominated by cash, is evolving to meet the demands of its increasingly smartphone-led online shopping culture, with cards and digital wallets rising in prominence
  • By region, South India accounted for 34.6% share in 2020 and is expected to witness significant growth over the coming years. The West India region is anticipated to witness the second-highest growth over the forecast period

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Ryan Shaw

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Ryan Shaw
Joined: August 11th, 2017
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