The online grocery market is anticipated to be valued at US$ 377.4 billion in 2023 and is projected to reach US$ 3,396.9 billion by 2033. Furthermore, the market is expected to experience a surge with a Compound Annual Growth Rate (CAGR) of 24.60% from 2023 to 2033.
Online grocery shopping has been popular among younger generation, but COVID-19 outbreak pulled this novel form of shopping to mainstream. Apart from millennial, which account for more than 32% of the global population, online grocers also witnessed sizable traction from new customer archetypes. These customer groups were geriatric and sub-urban consumers. Witnessing traction from such a diverse customer archetype, online grocers also worked on their offering and expanded the portfolio of products and inventories.
Driven by the increasing consumer spending, improving rate of employment and overall economic growth, online grocery shopping has spurred. Several brands have reported a Multifood surge in sales as a direct consequence of strategies undertaken to boost their online presence and portfolio.
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Following e-commerce boom, online grocery shopping is gaining momentum – a trend which is unlikely to subside in the near future. FMI offers valuable insights into the online grocery market. Some of these are:
- Personalized and smart packaging are likely to dominate the online grocery shopping scene. FMI’s data, revealing that packed food has comfortable lead over other product types, reiterates the same observation
- Presence of a high percentage of millennial has sealed East Asia’s position as a highly lucrative market for online grocery
- Subscriptions segment is poised to surge at a higher CAGR among purchaser type. Subscription based online shopping is expected to gather steam as consumers look for better convenience and personalized solutions
Economists at FMI says that online grocery shopping is one of the fastest growing sectors in the U.S. retail. As the number of online shoppers grow it is expected that e-retailers would focus on unique strategies. For instance, many of established e-retailers are partnering with small and medium service providers who would help them with door-step delivery to consumers.
Besides leveraging strategic collaborations, several e-retailers are innovating smart packaging solutions to improve overall purchase experience. QR codes are often used to offer special discounts and coupons to customers.
Overall, there is increasing focus on digitizing solutions to cater to the changing consumer needs. For instance, Amazon.Com Inc. has invested heavily in the development of its integrated and high-tech logistics. Through this, it intends to expand its network and geographical footprint.
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Who is winning?
Some of the key players operating in the online grocery market are
- Amazon.com Inc.
- Walmart Inc.
- The Kroger Co.
- Peapod LLC
- Fresh Direct LLC
- Publix Super Markets Inc.
- Target Corporation
- Best Buy Co. Inc.
- Instacart
- Costco Wholesale Corporation
- Safeway Inc.
- Carrefour S.A.
- Edeka Group
- Tesco PLC
- Aldi
- Alibaba Group
- JD.com
- Honestbee
- Grofers India Pvt. Ltd.
- Avenue Supermarts Ltd.
Several online grocery/ e-retailer companies are entering into strategic partnerships with prominent retailers to cater to the growing demand for groceries and other essential items.
- Walmart Inc. has entered into a strategic partnerships with four third-party delivery providers which are Point Pickup, Skipcart, AxleHire, and Roadie to help the company provide on-time delivery to its customers
- In India Domino’s Pizza, Uber, Rapido, Swiggy, Zomato, and other have ventured into grocery delivery in collaboration with online grocers such as BigBasket and Grofers and retail chains such as Big Bazaar and Spencer
