India Online Grocery Market Report and Forecast 2024-2032

India Online Grocery Market Size

The India online grocery market reached a value of USD 4.8 billion in 2023. The fluctuating market is highly dependent on investments but is expected to show a steady growth in the coming few years.

India Online Grocery Market Outlook

• India's annual transacting e-retail shopper base is scaled to 230–250 million people in 2023, where over 100 million shoppers were added in the last three years.

• India online grocery market expansion is driven by rising internet and smartphone penetration, increasing digital payments adoption, and expanding reach to smaller cities.

• As per industry reports, 7 out of 10 online shoppers now reside in tier 2+ cities, which also includes grocery shopping.

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India Online Grocery Market Growth

An online grocery store can either be an independent e-commerce service selling grocery or a brick-and-mortar grocery store or supermarket that allows online ordering. These platforms can include beverages, bakery, canned goods, dairy, frozen foods, meat, fresh fruits and vegetables, homecare cleaners, and personal care products, among others.

While less than 2 million of Indian grocery consumers buy their groceries through online platforms, the India online grocery market has the potential for growth, especially with the increased penetration of the internet. The market is highly concentrated with players like Big Basket and Grofers, that are thriving in regional markets like Bangalore, Hyderabad, and Delhi-NCR.

Key Trends and Developments

Expansion of product offerings, adoption of a hyperlocal approach by online grocery retailers, and introduction of subscription-based models have led to the India online grocery market development

May 2024

City Mart Supermarket now offers free 10-minute grocery delivery across India. Customers can enjoy safe and contactless home delivery of fresh vegetables, fruits, high-quality groceries, and home appliances.

May 2024

Abu Dhabi Investment Authority (ADIA) and KKR have invested approximately USD 1.5 billion in Reliance Retail's warehousing assets. The partnership highlights the growing interest in India's retail sector and the potential for strategic investments in the country's retail infrastructure.

April 2024

Reliance Retail's FY24 sales surpassed INR 3 lakh crore, outpacing the combined sales of India's leading consumer companies, including ITC, HUL, D'Mart, Nestle, Britannia, Tata Consumer, and Godrej Consumer. This revenue growth places Reliance Retail at the forefront of the Indian retail sector.

November 2023

Nature's Basket opened its largest store in India at Phoenix Palladium, Mumbai to tap into the growing consumption of gourmet food products. The new store features a specially curated wine cellar, cheese room, chocolate factory, farmer's market, live honey counter, exotic fresh meat.

March 2020

BigBasket, the online grocery platform, joined the coveted Unicorn Club by raising USD 150 million in fresh funding from Alibaba, its largest shareholder, and other new investors like UK's CDC Group and South Korea's Mirae Asset.

Diversification of product offerings

Online grocery platforms have expanded their product offerings beyond staple food items to include fresh produce, dairy, bakery products, gourmet items, and ready-to-eat meals. This allows consumers to fulfill all their grocery needs in one place and supports India online grocery market expansion.

Hyperlocal approach for faster deliveries

The adoption of a hyperlocal approach by online grocery retailers involves setting up small warehouses or dark stores in urban areas to ensure prompt deliveries, sometimes within hours of placing an order. BigBasket has established a network of over 40 dark stores across major cities to facilitate faster deliveries.

Subscription-based models for loyalty

Subscription-based models offering free or discounted deliveries, has gained popularity in the India online grocery market outlook. Amazon's Prime membership program, which includes free and fast delivery on eligible items, has been successful in driving customer loyalty and repeat purchases.

Integration of technology for personalised experiences

Flipkart, a leading e-commerce platform in India, has introduced an AI-powered grocery recommendation engine that suggests products based on a user's browsing history and purchase patterns. This trend enhances user engagement, encourages larger cart sizes, and improves overall customer satisfaction.

Collaboration between online grocery platforms and EV manufacturers

Online grocery platforms are increasingly collaborating with electric vehicle manufacturers to develop customised EV solutions for last-mile delivery. BigBasket has partnered with Mahindra Electric to deploy the latter's electric three-wheelers for deliveries in select cities.

India Online Grocery Market Trends

The market is also likely to be aided by the increasing availability of cheaper smartphones and declining data tariffs. With the government promoting digital literacy and the digital economy framework, the industry will receive a further impetus for its growth. The market is expected to be aided by the consumers in Tier-I cities who are more adaptable to online shopping due to the availability of highspeed internet, better adaptability to mobile devices, and the logistical simplicity.

Indian consumers are also trying grocery by international brands and cuisines, further propelling the India online grocery market growth. They are also willing to pay more for premium and organic food. Further, the market is also finding impetus in the rise in the number of women in the workforce.

Moreover, major players are expected to adapt their platforms to local languages and introduce better voice search features to expand their potential consumer base. Other attractive offers like low delivery charges, fast delivery, cashback offers, and flexible return policies by e-commerce websites dealing with groceries are also expected to drive the market in the coming years.

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India Online Grocery Industry Segmentation

The EMR’s report titled “India Online Grocery Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Category

• Grocery and Staples

• Fruits and Vegetables

• Others

Market Breakup by Average Spend per Transaction (in Rupees)

• <1,000

• 1,000 to 1,500

• >1,500

Market Breakup by Platform

• Website

• Mobile Application

Market Breakup by Payment Method

• Online

• Cash on Delivery

Market Breakup by Region

• North Region

• East and Central Region

• West Region

• South Region

India Online Grocery Market Share

Mobile applications leads to higher grocery sales due to their convenience and user-friendly interface

Mobile applications have emerged as the dominant force in the online grocery sector as consumers in India prefer the convenience and user-friendly interface of mobile apps for their grocery shopping needs. BigBasket, Grofers, and Amazon Pantry have invested in developing robust mobile applications to cater to this growing demand.

While mobile apps have seen rapid adoption due to the widespread use of smartphones and mobile internet, desktop websites continue to serve a significant portion of the market, especially in smaller cities and towns where access to smartphones may be limited. As per India online grocery market analysis, these websites still hold relevance among older consumers and those more accustomed to traditional desktop browsing. Websites provide a larger screen space for browsing products and offers, making them a preferred choice for some shoppers.

Online payments segment holds a significant share of the market due to growing digitalisation in India

Online payments dominate the online grocery market in India due to the increasing acceptance of debit/credit cards and the popularity of digital payment platforms like Paytm, PhonePe, and Google Pay. This method offers convenience and security to consumers, enabling faster checkout processes and reducing cash handling costs for retailers, contributing to a seamless shopping experience for customers.

Despite the rise of online payments, COD continues to play a significant role in catering to consumers in smaller cities and towns, as well as those with limited access to digital payment options.  It provides a sense of security to consumers who prefer to pay at the time of delivery, especially for those who are hesitant to make online transactions.

Leading Companies in the India Online Grocery Market

Market players are focused on delivering groceries from local stores within a specific radius, expanding product offerings beyond staples, and adopting subscription-based models to incentivise loyalty

Blink Commerce Private Limited, known as Blinkit, was founded in 2013 and is headquartered in Gurgaon, India. It operates as an online grocery delivery platform, offering customers a convenient way to shop for a wide range of groceries and have them delivered to their doorstep.

Amazon.com, Inc., a global e-commerce giant, was founded in 1994 and is headquartered in Washington, United States. It offers a diverse range of products and services, including e-commerce, cloud computing, digital streaming, and artificial intelligence.

Nature’s Basket was founded in 2005 and is based in Mumbai, India. It is a gourmet food retail chain that specialises in offering fresh produce, international cheese, bakery items, and a variety of gourmet products to its customers.

Spencer's Retail Limited, founded in 2005 and headquartered in Kolkata, India, is a supermarket retail chain that offers a wide range of products and services, including groceries, household items, and apparel, among others.

Other key players in the online grocery market in India include Innovative Retail Concepts Private Limited, Flipkart Private Limited, Paytm, Avenue Supermarts Limited, Reliance Retail Limited, and Fiora Online Limited, among others.

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India Online Grocery Market Analysis by Region

Northern region leads the market due to its high population and large base of working women

North region's high population density and urbanisation levels contribute to a strong demand for online grocery services. Major cities like Delhi and Chandigarh are key hubs for online grocery platforms, attracting a large customer base and driving the growth of the sector in the region.

Cities like Mumbai, Pune, and Bangalore are key contributors to the India online grocery market growth. The strong economic activity, high literacy rates, and tech-savvy population in these cities create a favorable environment for the online grocery sector to thrive.

Key Highlights of the Report