Global Online Grocery Market Outlook, 2028

The purchase of fresh and packaged food via online portals is referred to as online grocery. Grocery shopping habits have evolved over time as a result of the easy availability of products through stores and online platforms. The online grocery service is a niche market, but it is expected to grow rapidly in the coming years. People nowadays prefer grocery shopping from online medium because it is convenient and offers a wide variety of products that can be delivered to the consumer’s doorstep within a specified time frame. Additionally, customers can keep track of their spending. Online grocery stores sell a wide range of products, including bakery and dairy items, cereals, vegetables, and fruits. Hectic schedules, an ageing workforce, and time-consuming transportation all create chances for corporations and entrepreneurs to establish online grocery stores. Consumers are becoming more aware of the many buying trends that exist in society as technology advances and internet usage increases. Millennials and Generation Z are the market’s most appealing consumer segments. These are the most technologically savvy customers, and they are willing to pay a premium for same-day product delivery. However, concerns about the freshness of fruits and vegetables, as well as high delivery fees, pose threats to market growth. The multiplicity of online payment choices and assurances for contactless delivery of purchased groceries provided by online grocers are projected to contribute to market expansion. Grocers' introduction of innovative business models, such as scheduled or expedited delivery and on-demand or subscription delivery methods, is also driving consumers to purchase for groceries online. Attractive discounts provided by service portals, as well as increased levels of disposable money, are also important factors driving industry expansion.

According to the research report, “Global Online Groceries Market Outlook, 2028” published by Bonafide Research, the market is anticipated to cross USD 1450 Billion by 2028, increasing from USD 397.06 Billion in 2022. The market is expected to grow with 25.14% CAGR by 2028. The online channel is offering more options for consumers as compared to the conventional channels. As a result, e-commerce platforms enable consumers to compare numerous products and make an informed purchasing decision. This also allows grocers to increase brand awareness while focusing on quality. Features such as remembered preferences and order history for reordering contribute to the ease of consumers and encourage them to choose online grocery shopping, fuelling industry growth. Consumers intend to choose alternatives that provide flexibility and punctuality in terms of time, provided their increasingly busy schedules and desires for a successful career life. Online retailers offer both convenience and flexibility because shopping hours are not restricted, and customers are free to shop at any time that suits them. Furthermore, the widespread use of internet services, the proliferation of smart devices, and the availability of impel virtual payment methods make online platforms easier and more convenient for customers, resulting in increased demand for the online grocery industry. In addition, the rising trend of sustainable delivery and eco-friendly packaging is also accelerating industry growth as consumers are becoming increasingly conscious about their purchasing decisions. Various delivery choices, such as same-day or rapid delivery and click & collect, remain niche for market expansion. Grocers in the United States, for example, are offering contactless grocery delivery and accelerating delivery to next-day or same-day delivery. This is encouraging small-scale grocers to join forces with third-party service providers, such as Instacart, and make a foray into the market. Food-delivery platforms, such as Uber Eats and DoorDash, are also making a market foray finding the market highly lucrative.

Based on the report, the market is segmented into five major regions including North America, Europe, Asia-Pacific, South America and Middle East & Africa. Among them, Asia-Pacific occupied more than half of the market share in 2022. The growth of the regional market can be credited to supportive government initiatives in the countries such as China and India. The thriving e-commerce sector and swift digitization witnessed in countries such as China and India have provided new growth opportunities for the online grocery delivery services industry in the Asia-Pacific zone. Citing an instance, in the first half of 2016, the Indian government declared nearly 100% foreign direct investments in the food retail sector. The rising population, increasing disposable income and sophisticated food-loving consumers across the region are driving increased demand for the industry. Furthermore, increased mobile accessibility and broadband adoption are putting the traditional grocery-buying business model to the test, allowing customers to buy food from anywhere, at any time. However, Europe is expected to be the second-highest region by focusing on expanding its existing base. A significant investment in promotional campaigns is anticipated to boost the growth of the online grocery market. Furthermore, the increasing adoption of advanced technologies such as artificial intelligence (AI), the internet of things (IoT), and big data is fuelling market expansion. The increased usage of mobile payment methods by government administrations and financial organisations to combat virus transmission is predicted to raise market income. Several payment companies have converted to contactless payments, which has contributed to the market's growth.

Based on the product type, the staples & cooking essentials segment accounted for the largest market share in 2022. Increased consumption of staple foods such as rice, corn, wheat, and others, as well as culinary essentials such as oil, seasonings & spices, sugar, and others, is predicted to drive the segment's expansion in the global market. A food staple is also food that is consumed in great amounts by a people. Since food staples provide a significant amount of a person's energy and nutritional requirements, the demand for the staples and cooking essentials is anticipated to rise over the forecast period. On the other hand, the breakfast & dairy segment is expected to witness the significant market growth over the forecast period. Rising dairy consumption in rising economies such as India, China, and Japan is likely to boost the online grocery sector forward. Furthermore, the sector is being driven by consumers' growing health consciousness and consumption of nutritious foods to maintain excellent health. Further based on the delivery type, the click & collect model has become a prerequisite for shoppers demanding convenience in picking up their goods. The model involves consumers ordering products online and then picking them up at a pre-determined location. The click & collect method provides complete control to the consumers over the delivery of their products along with the provision of various options for collection, fulfilment, and eliminating unprofessional delivery services. Cost-effectiveness is another primary factor for the adoption of the click & collect model among consumers as it offers zero or minimal added delivery costs. It enables consumers to check the quality of the product, pick up orders at their convenience, and save shipping costs. The model has also been beneficial to retailers, helping them to eliminate the need of hiring delivery persons or renting vehicles, and pay a one-time cost to set up the click & collect system.



Traditional retailers have remained the full basket-offerings option for both online and offline. Players such as Walmart, REWE, Ocado, and Tesco have a large assortment with same-day, scheduled delivery. Meal Kits are being used as a replacement for these products by consumers. Quick Commerce is replacing convenience stores with smaller product offers that are centred on top-up and confectionary items. Another aspect driving market expansion is the rise of shopping subscriptions. Almost every major market player provides consumers with a subscription option. In the United States, for example, Kroger Co. offers the "Delivery Savings Pass" for USD 79 per year. The programme envisions removing the USD 10 shipping fees that the company normally charges, albeit orders must be worth at least USD 35. Similarly, Walmart's Walmart+ membership programme charges customers USD 98 per year for free delivery on all supermarket orders of USD 35 or more. Similarly, Walmart's Walmart+ membership programme charges customers USD 98 per year for free delivery on all supermarket orders totaling USD 35 or more. Leading market players in India, such as BigBasket and Blinkit (previously Grofers), have been playing a niche role in quickly driving subscription service uptake. For example, BigBasket's BB Star Membership programme costs USD 3.92 (INR 299) for six months and entitles clients to free delivery, rewards, and priority slots. The benefits associated with such subscription services are projected to assist online grocers in gaining customer trust and, as a result, encourage more customers to opt for annual subscription services, hence boosting market expansion throughout the forecast period.

The availability of smartphones or smart devices at home, along with Internet connectivity, has also led to a growth in the online sales. Increased liking for hassle free shopping and a growing inclination towards the ecommerce platforms is also expected to help the market grow. Over the course of the projected period, the online grocery market growth is anticipated to be driven by two key factors. The shifting consumer buying habits as a result of the pandemic's onset and the unrelenting expansion of the e-commerce sector is a primary growth driver. Secondly, Online grocers gain access to a variety of payment options as well as guarantees for contactless delivery of ordered groceries. This is expected to help the market grow throughout the forecast period. Multiple speciality delivery choices, such as click & collect and same-day delivery, will always be available for this market to grow significantly during the projection period. Traditional grocery merchants are also embracing ecommerce approaches in order to easily meet the grocery needs of time-pressed and tech-savvy consumers at their doorstep. The convenience and benefits associated with online grocery retail, such as omni-channel experience, pricing advantages, and faster delivery, are fueling the worldwide online grocery market's rise. Western countries have a stronger penetration of the online grocery business. However, market penetration is relatively low in some of the world's largest grocery markets, including India, China, and Brazil. With an immensely wide consumer base, as well as increased internet and smart phone penetration, the online grocery business is experiencing profitable growth in developing countries. Because of the region's rapid growth, various regional and small players have emerged.

Online retailers are developing an efficient supply chain to reduce delivery timelines, which will positively influence the market demand. For example, Paytm Mall, an e-commerce company, revealed plans in June 2020 to adopt same-day hyperlocal grocery delivery in order to broaden its client offerings. During the COVID-19 lockdown period, the technique allowed it to quickly provide grocery basics to people in Tier-II and Tier-III cities across India. Due to the temporary closure of some brick-and-mortar grocery businesses, online grocery market operators' quarterly revenue increased dramatically in FY2020. In addition to that, several technological developments, such as the rise of automated fulfilment centers and new delivery solutions, facilitate the delivery speed and further help position online stores as quick and convenient solutions. The increased rivalry for higher online market shares is projected to result in smaller order sizes for free delivery and novel last-mile network solutions, which will further cut costs and boost accessibility. Many new entrants are establishing themselves in this industry by utilising modern strategies and techniques to attract customers. For example, in April 2020, Walmart Inc. announced the "Neighbours Helping Neighbours" programme in conjunction with Nextdoor, Inc. to make it simpler for neighbours throughout the country to aid one another during the COVID-19 epidemic. With this programme, Nextdoor users can ask for aid or offer to assist others in shopping for critical things at Walmart.

Amazon’s grocery services are getting stronger, allowing shoppers to pick from among quality produce, meat and seafood, dairy and eggs, frozen foods, household items and beverages and alcohol. With features like “shop by recipe” or “shop by aisle,” Amazon is providing their shoppers with the convenience of online grocery shopping without sacrificing the personalization of an in-store experience. Amazon provides an extraordinary level of customization, including order cancel and edit capabilities, Alexa integration and 24/7 customer service. 1-hour pickup or 2-hour delivery windows are also available in cities across the US. In addition, with Whole Foods Markets and Amazon Fresh physical stores popping up around the country, shoppers are given the reassurance of dealing with a physical grocery store rather than just an anonymous online provider. Amazon has proved time and time again to be the top contender in e-commerce, and it's no different when it comes to the grocery sector. The speed, personalization and adaptation to changing needs and behaviours have all helped Amazon stay ahead of the curve and make changes and improvements to only keep optimizing the customer experience. Some of the other online platforms for groceries include Instacart, Walmart Grocery, Shipt, FreshDirect, Peapod, Fresh Thyme Farmers Market, Kroger, Boxed and Thrive market etc.

Recent Developments:
• January 2021: Walmart has announced that it is planning to expand its automated systems for online grocery orders of pickand-pack shoppers. The company is planning to expand its high-tech systems that pick and pack online grocery orders. The company saw the orders in online groceries spike during the coronavirus pandemic and now is trying to keep its competitors at bay by keeping low costs.
• Walmart has announced plans to launch a new subscription service called Walmart+. This service will offer free unlimited delivery, discounts on fuel, and other benefits to its customers.
• Amazon has recently launched its first cashier-less grocery store in the United Kingdom, called Amazon Fresh. The store uses advanced technology, including cameras and sensors, to allow customers to walk in, pick up items, and walk out without waiting in line or paying at checkout.
• Instacart, a leading online grocery delivery platform, announced that it had raised $500 million in funding to expand its operations and invest in new technology.
• Anycart, a tech business, introduced the first online grocery shopping engine in May 2021. To ensure a frictionless experience for customers and major retailers during the pandemic and beyond, the software technology business has solved fundamental consumer hurdles in online buying.
• Lollipop AI introduced an online food store in June 2021 where customers could create their meals. The application enables users to create meal plans from recipes, automatically adding the necessary components to their shopping carts and recommending any other household necessities.

Major Companies present in the market:
Amazon, Alibaba, Tesco, Walmart Inc, Koninklijke Ahold Delhaize N.V.,, Rakuten Group Inc., Supermarket Grocery Supplies Private Limited, Choithrams , Zomato, Jumbo , Reliance Retail, MercadoLibre, Inc., Target Brands, Inc., Jumia Technologies AG, Carrefour, Costco Wholesale Corporation, Edeka Zentrale Stiftung & Co. Kg, Albertsons Companies, Inc, LuLu Hypermarket , Ocado Retail , Spinneys ELIENIDAS, Wegmans Food Markets, Inc

Considered in this report
• Geography: Global
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report
• Global Online Groceries market with its value and forecast along with its segments
• Region-wise Online Groceries market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions & Countries covered in the report:
• North America (United States, Canada, Mexico)
• Europe (Germany, United Kingdom, France, Spain, Italy, Russia)
• Asia-Pacific (China, Japan, India, Australia, South Korea)
• South America (Brazil, Argentina, Colombia)
• Middle-East & Africa (UAE, Saudi Arabia, South Africa)

By Product Type
• Staples & Cooking Essentials
• Snacks & Beverages
• Breakfast & Dairy
• Fresh Produce
• Meat & Seafood
• Others

By Delivery Type
• Home delivery
• Click and collect

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the online grocery industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.