Online Grocery Market Size (2024-2030)

The Global Online Grocery Market is estimated to be worth USD 381.85 Billion in 2024 and is projected to reach a value of USD 1750.62 Billion by 2030, growing at a fast CAGR of 24.30% during the forecast period 2024-2030.

With the increase in the use of the internet, consumers have shifted their preference towards online shopping, and grocery shopping is one of them. The traditional ways of shopping from physical grocery stores have reduced recently as people started giving importance to convenience. Moreover, rapid urbanization owing to a fast-paced lifestyle has increased online grocery shopping. Further, facilities such as faster delivery, 24*7 availability, and accessibility have attracted consumers to shop for grocery items online. Additionally, the adoption of e-commerce increased during the pandemic as a result of the global lockdown and physical grocery stores started availing their items online for consumers. Apart from this, advancements in technology such as AI virtual assistants, voice order tech, and predictive analytics for monitoring consumer buying habits and providing them with future recommendations, and others have increased the importance of online grocery shopping in the market.

Further, the growing trend of ready-to-eat meals and subscription delivery has become popular among working people due to benefits such as less preparation time, accessibility, availability, and longer shelf life.

Global Online Grocery Market Drivers:

An increase in consumers’ demand for convenience shopping has bolstered the demand for Online Grocery Market.

Consumers' demand for convenience has increased the demand for online grocery shopping. This is due to the fast-paced lifestyle owing to long working hours and hectic schedules. Further, online purchasing enables hassle-free shopping for consumers and saves them time. Furthermore, if there is non-availability of any item then facilities such as home delivery and specific time delivery have increased consumers’ demand for online grocery shopping. Moreover, the 24*7 availability of grocery items online and good quality products such as packed foods or vegetables with long shelf life has made it convenient for customers to depend on online grocery stores. Furthermore, there has been an increase in online delivery and click-and-collect service among consumers as it saves their time, reduces shipping costs, and provides convenience.

The advancement in technology in online grocery stores has boosted the demand for Online Grocery Market.

The entry of technology in online grocery shopping has provided numerous benefits to both shopkeepers and customers. These include self-checkout options, the use of AI assistants, supply chain management software, store-level warehouse management software, and others. Furthermore, analytics is increasingly used in online grocery apps that help customers to purchase items that they want using navigation recommendations, providing personalized discounts and coins for future shopping, push notifications for frequent buyers based on their buying habits, and others. Additionally, AI and predictive analytics is helping online grocery stores to recommend items to consumers based on their historical purchases and forecast future consumer needs so that grocers can stock their warehouses to cater to future consumer demand. For example, Walmart’s Big Data Analytics Solutions for online grocery shopping, which include customized recommendations based on purchase history, inventory management solutions, Shopycat-gift recommendation engine that recommends ideal gifts for friends by analyzing the social profiles of their customers, and tracking customers to increase its sales.

Global Online Grocery Market Challenges:

Maintaining perishable commodities quality is a challenge for online grocers. Consumers can avoid online shopping for meat, bread, eggs, vegetables, and other perishable commodities due to freshness problems. The quality of these goods can deteriorate due to time and temperature and hence consumers can avoid shopping them online. Furthermore, the inability to check product quality physically as a result of online shopping and delivery can hinder the growth of the online grocery market. Furthermore, rising shipping and delivery costs can affect consumers’ online grocery purchases. Most consumers face high delivery costs and sometimes replacement costs due to the wrong delivery of items, which can result in a decline in online shopping by consumers. Further, many consumers avoid online grocery shopping because of wrong delivery of goods or sometimes delivery of damaged goods such as torn cartons of liquid commodities, expiry date products, rotten vegetables and fruits, and others. Therefore, all these restraints must be eliminated to decline the challenges to the online grocery market.

COVID-19 Impact on the Global Online Grocery Market:

The pandemic increased the demand for online grocery shopping as a result of the global lockdown. Furthermore, consumers shopped grocery items online due to benefits such as contactless delivery, sealed food items, safe handling, and packaging. Moreover, accessibility and easy availability were the prime factors that contributed to the growth of the online grocery market. An increase in sales was witnessed for packaged and ready-to-eat food items as they provided long-shelf life and reduced the need to hoard food items during the pandemic. Additionally, cashless transactions and online delivery increased during the pandemic due to social distancing norms. Further, as consumer shifted their preference towards online grocery shopping, local retailers and grocers made their products available online for customers with attractive offers such as discount and cash-back offers. Hence, online grocery shopping eliminated the barriers posed by the global pandemic.

Global Online Grocery Market Recent Developments:

• In April 2020, Box8 launched an online grocery service app called Instafresh. The company offered delivery options to only three cities in India – Mumbai, Bengaluru, and Gurugram to cater to consumer demand during the pandemic. It offered delivery of dairy products, self-branded bakery products, fruits, and vegetables within 30 minutes.
• In April 2021, Tata Digital acquired a majority stake in Bengluru’s online grocery startup – BigBasket. This facilitated Tata Digital to expand its digital footprint in the online grocery segment and compete with others.
• In September 2022, Instacart, a leading grocery technology company located in North America along with Good Food Holdings launched connected store technology in California that provided a unified online and in-store shopping experience for consumers. This facilitated customers to navigate between a retailer’s website or app and in-store as well.

Global Online Grocery Market Segmentation:

GLOBAL ONLINE GROCERY MARKET REPORT COVERAGE:

Global Online Grocery Market Segmentation: By Product Types

• Fresh Products
• Dairy Products
• Packed Foods
• Ready-to-eat foods
• Staples & Cooking Essentials
• Others

Based on market segmentation by product type, staples, and cooking essentials occupies the highest share in the online grocery market. Staples and cooking essentials including grains, pulses, spices, oil, and other necessities are highly demanded by consumers. Since these products are consumed by the majority of the population their demand through online channels has increased as a result of accessibility and easy availability. Further, as consumer preferences shift towards consuming a healthy diet demand for whole grains has increased. Moreover, as a result of consumer demand for nutrient-rich food, many farmers and local agricultural retailers have made available fresh and organic farm goods available on online grocery apps. For instance, with the help of the e-governance department in India, the e-Sahamathi app was launched in 2021 that connected farmers to online grocery apps such as Big Basket, reliance Fresh, Nature’s Basket, and Ninjacart for providing healthy and nutrient-rich food options to customers. In addition to that, countries in the Asia-Pacific region such as India have the largest consumer base for food staples and cooking essentials.

The second position by product type is occupied by ready-to-eat foods. Ready-to-eat foods include instant noodles, pasta, fried items, and others. The demand for these products has increased due to the busy schedule and long working hours of people and as a result, people are shifting their preference towards these goods as these products require less preparation time. Further, with convenience people are also giving preference to vegan and organic ready-to-eat foods for a healthy and nutrient-rich diet. Countries such as the USA have the largest consumer base for ready-to-eat products.

Global Online Grocery Market Segmentation: By Delivery Model

• On-demand Delivery Model
• Subscription Delivery Model

Based on market segmentation by delivery model, subscription occupies the highest market share. This model helps consumers to purchase groceries online without paying any additional fee or delivery charges as the cost is already covered in the subscription. Furthermore, it proves flexible billing options and cancellation options at any time without any hassle. Moreover, the subscription-based model provides various other benefits to consumers such as discount coupons, cashback, and early access to sales. Further, Amazon, BigBasket, and Grofers are the leading players in the subscription-based grocery model.

Global Online Grocery Market Segmentation: By Region

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• South America

Based on market segmentation by region, North America occupies the highest share of the online grocery market. Online grocery occupies a major share of the e-commerce sector of the region. Further, packed foods and ready-to-eat foods are popular among school-going children and teenagers. Additionally, there has been an increased demand for breakfast cereals and dairy products such as cheese, milk, and butter on online grocery apps among young adults. Further, the online presence of big grocery companies such as Walmart, Amazon, and Instacart, has increased consumers’ trust in the brand and increased their demand for online grocery shopping. This has boosted the revenue of these companies and induced them to provide enhanced customer service. For instance, As per Walmart’s annual report for 2022, Walmart's US segment, which consists of e-commerce and omnichannel sub-segment has witnessed an increase in online grocery sales accounting for US$ 218 billion in 2022.

The second position by region, is occupied by Asia-Pacific. The region witnesses an increased demand for online grocery shopping due large population, increase in income, and changing lifestyle and food habits. Further, countries such as India have witnessed an increase in online grocery shopping after the pandemic as people shifted their attention from local stores to online channels to cater to their demands. Additionally, stape food and cooking essentials such as oil, spices, sugar, packed and cut vegetables, and fruits witnessed an increase in demand in the country. Moreover, collaborations of online grocery companies with local retailers have provided consumers with a variety of healthy food options. For instance, Jiomart, which is a joint venture of Reliance Retail has been partnering with local grocery stores and farmers to expand its presence and provide consumers with fresh and healthy food products. In addition to that, the availability of online grocery stores on WhatsApp and Facebook has further made the grocery shopping experience seamless, fast, and efficient.

Global Online Grocery Market Key Players:

1. Walmart
2. Amazon Fresh
3. Grofers
4. Big Basket
5. Tesco
6. Blinkit
7. Dunzo
8. Dmart
9. Fresh Direct LLC
10. Jio Mart