research on online grocery shopping in india

Factors Affecting Online Grocery Shopping in Indian Culture

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• Ashish Kumar Singh 26 &
• Nishi Pathak 26  

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Today the online grocery shopping (OGS) is helping customers by making their life convenient by offering best and comfortable deals. Scope of online grocery shopping is increasing exponentially. Therefore, this study aims at examining the influencing role played by personal innovativeness (PI), economic values (EV), design aesthetic (DA), perceived enjoyment (PEJ) and convenience (CON) attributes on development of positive attitude to use OGS by Indian customers. For testing the variables and relationship of the proposed model, a structured questionnaire was formed and dispersed among 351 Ghaziabad and Delhi residents, out of which 232 were used for analysis. The Smart PLS 3.0 programme has been used to provide partial least square structural equation modelling (PLS-SEM) method. Finding a study easy to use (PEOU), perceived usefulness (PU), PI, EV, DA and PEJ and CON have a symbolic quantitative correlation in India with the acceptance of OGS. In contrast, PEJ did not support PEOU. Therefore, the study will provide direction to all online grocery service providers to design their services according to the customer’s expectation and need.

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Singh, A.K., Pathak, N. (2021). Factors Affecting Online Grocery Shopping in Indian Culture. In: Singh, P.K., Polkowski, Z., Tanwar, S., Pandey, S.K., Matei, G., Pirvu, D. (eds) Innovations in Information and Communication Technologies (IICT-2020). Advances in Science, Technology & Innovation. Springer, Cham. https://doi.org/10.1007/978-3-030-66218-9_1

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India Online Grocery Market

India Online Grocery Market Forecast by Product Type for 2023 to 2033

AI-Powered Personalization Boosted India Online Grocery Market Set to Grow 2X between 2023 and 2033? Get to know the Key Highlights to get your Strategies Right.

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India Online Grocery Market Outlook

The India online grocery market size is predicted to reach a valuation of US$ 6.8 billion by 2033. Our food and beverage industry analysts opine that India online grocery providers can expect a CAGR of 7.8% through 2033, with a current valuation of US$ 3.2 billion in 2023.

Key Market Highlights:

Indigenously Developed UPI Paving the Way for Success of Online Grocery Industry in India

The rise of digital payment methods is significantly influencing the development and evolution of the online grocery market in India. This change in the payment environment has significantly affected the digital grocery industry trends. Smartphones provide high accessibility to digital payment systems like digital wallets and UPI (Unified Payments Interface). Customers from rural and metropolitan areas alike find it convenient to use cashless payments for their online grocery orders, eliminating the requirement for actual currency exchanges. In conjunction with its Digital India effort, the Indian government has actively encouraged digital payments. Citizens have been urged to embrace digital payment systems by programs like demonetization and the promotion of UPI. Due to its interoperability, UPI, in particular, is increasing in popularity and boosting India online grocery market trends.

Several countries are adopting UPI, with Bhutan being the first one to adopt it in July 2021. India is reportedly keen on introducing UPI with 30 countries in the upcoming years. This development can boost India online grocery market’s potential substantially by offering globalized access to vendors and providers.

Tech Innovations Altering Market Dynamics

Technology advancements have drastically altered the Indian online grocery sector. These innovations cover a broad range of developments that boost overall market growth, transform the consumer experience, and streamline operations.

AI (Artificial Intelligence) and machine learning algorithms are two of the most well-known technological advancements. These technologies have made it possible for online grocery delivery services to offer individualized shopping experiences. AI-driven recommendation systems examine user activity and prior purchases to make product recommendations that are specific to each user's tastes. This improves client happiness, promotes customer loyalty, and makes the purchasing process more efficient. This also drives the online wholesale grocery market in India.

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Historical Performance of India Online Grocery Market (2018 to 2022) Vs. Forecast Outlook (2023 to 2033)

In recent years, online grocery market in India has experienced impressive expansion as well as shifts. Due to variables like growing internet penetration, smartphone use, and changing customer tastes, this period has observed a significant growth in online grocery buyers. Online grocery purchase has become an everyday affair due to the market's growing adoption of digital channels.

Notably, e-commerce behemoths like Amazon and Flipkart entered India's online grocery delivery market, bringing significant infrastructure and resource investments. They increased competition, which sparked strong marketing and promotional campaigns that accelerated the market's growth.

Geographically, the market expanded its reach to include smaller cities, villages, and larger cities. Online grocery platforms could access underserved areas by extending into Tier II and Tier III cities, thereby expanding the market's reach.

For both domestic and foreign investors, Indian online groceries market continues to be lucrative. Market expansion will be fueled by ongoing investment inflows, allowing platforms to expand their businesses and provide better services.

A continuous rate of growth will be possible through loyalty programs, subscription business models, and targeted marketing. Online grocery platforms will be able to develop strategies that better understand consumer behavior and preferences via data analytics. More effective marketing and individualized services will result from this data-driven strategy.

India Online Grocery Market Trend Analysis

Principal Consultant

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Find your sweet spots for generating winning opportunities in this market.

Category-wise Insights

Snacks & beverages occupy dominant shares.

Occupying nearly 28.90% of the India grocery market shares in 2023, snacks & beverages dominate over other product types.

The term "snacks and beverages" refers to a broad category of commodities that includes everything from chips and soft drinks to nutritious snacks and specialized beverages. This diversity attracts a large consumer base with a variety of desires and preferences. Consumers may simply find their favorite brands and flavors on online platforms as they frequently provide a wide assortment of these products.

Online platforms give customers a place to post feedback and suggestions. As customers rely on the experiences of others, favorable reviews and word-of-mouth recommendations greatly impact how consumers decide which snacks and beverages to buy. These factors amplify the convenience factors, boosting this segment's sales.

Online Payment Methods Gain Traction with Ongoing Technological Advancements

Attaining nearly 67.9% of the India online grocery market sales, the online payment method is highly preferred by consumers.

To keep up with the mobile-first strategy used by online grocery platforms, many digital payment merchants have created user-friendly mobile apps for Indian e-grocery market. For users, these apps offer a practical and reliable experience. Digital payment platforms are appealing options for customers because they frequently include cashback benefits, discounts, and loyalty programs. With each transaction, users can get rewards, which encourages them to keep utilizing digital payment methods.

By eliminating the need to manage cash on delivery, the adoption of digital payments streamlines operations for online grocery companies. This lowers the possibility of errors, increases accountability, and boosts the effectiveness of all transactions. Online shopping becomes easier with digital payments. Customers can quickly make payments using their preferred ways, removing the inconvenience frequently connected with cash or credit card transactions. This conveniently infers that the online payment gateway market is essential for the thriving online grocery market in India.

Region-wise Insights

North india possesses a robust online grocery market in india.

Due to its dense population and hectic lives, the National Capital Region (NCR), which includes Delhi and its satellite towns, has a thriving online grocery sector. There is a substantial presence of major players, including BigBasket, Grofers, and Amazon Fresh. While internet grocery shopping is expanding in Punjab and Haryana, traditional stores continue to dominate in some regions.

Bangalore, the capital of Karnataka, is a significant e-commerce center in South India, where online grocery shopping is very common. The online grocery business is expanding in Chennai, the capital of Tamil Nadu, especially in metropolitan areas. Hyderabad in Telangana has a thriving online grocery sector, and its tech-savvy populace embraces online shopping with open arms.

Mumbai, the capital of Maharashtra in West India, has a well-established online grocery sector that serves the metropolitan population through a combination of local and international firms. Online grocery shopping is expanding in Gujarati cities like Ahmedabad and Surat, yet traditional retail is still quite important.

Urban dwellers in Kolkata, West Bengal, and East India have embraced the convenience and savings offered by the development of various online grocery startups and established firms. Online grocery shopping is gradually gaining popularity in states like Odisha, Bihar, and Jharkhand, especially in metropolitan areas.

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Competitive Landscape

With significant firms such as BigBasket, Grofers, Amazon Pantry, and Flipkart Supermart, the industry scenario of the online grocery industry is extremely competitive in India. Reliance JioMart, supported by Reliance Retail, is a noteworthy competitor. There are also local and regional platforms. Logistics and supply chain management present difficulties. Government laws have an impact on the dynamics of the market, and mergers and acquisitions are frequent.

Recent Developments:

• Namdhari's Agro Fresh Pvt. Ltd, a high-end grocery store business, declared in July 2023 that it is seeking to raise between US$ 20 million and US$ 30 million as it tries to expand outside of South India.
• BigBasket raised US$ 200 million in additional fundraising in December 2022, raising the company's worth of the Tata Digital-owned online supermarket to US$ 3.2 billion.
• Other investors in the company, in addition to Tata Digital, which controls 64% of the Bengaluru-based business, took part in the investment round.

Key Companies in India Online Grocery Market

• Amazon India Pvt. Ltd.
• Godrej Nature’s Basket Ltd.
• Grofers India Pvt. Ltd.
• Paytm E0commerce Pvt. Ltd. (Paytm Mall)
• Reliance Retail Ltd. (Reliance Fresh)
• Spencer’s Retail
• Supermarket Grocery Supplies Pvt. Ltd. (BigBasket)
• UrDoorstep eRetail Pvt. Ltd.

India Online Grocery Market Segmentation

By product type:.

• Fresh Produce
• Breakfast & Dairy
• Snacks & Beverages
• Meat & Seafood
• Staples & Cooking Essentials

By Payment Method:

• Offline (Cash on Delivery)
• South India
• North India

Frequently Asked Questions

How big is india online grocery market.

India online grocery market size is valued at US$ 3.2 billion in 2023.

At What CAGR is the India Online Grocery Market Expanding?

India online grocery market is rising at a 7.8% CAGR through 2033.

What Will Be the India Online Grocery Market Size by 2033?

India online grocery market size will be worth US$ 6.8 billion by 2033.

What is the Leading Product Type in the India Online Grocery Market?

Snacks & beverages are the leading product type with 28.90% shares in 2023.

What is the Preferred Payment Method in the India Online Grocery Market?

Online payment methods dominate with 67.9% of the market shares in 2023.

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Academy of Marketing Studies Journal (Print ISSN: 1095-6298; Online ISSN: 1528-2678)

Research Article: 2021 Vol: 25 Issue: 3S

A Study on Consumers attitude towards Online Grocery Shopping In Covid19 Pandemic

Ramkishen Yelamanchili, K J Somaiya Institute of Management, Somaiya Vidyavihar University

Bharati Wukadada, Associate Professor, K J Somaiya Institute of Management, Somaiya Vidyavihar University

Aparna Jain, S K Somaiya College, Somaiya Vidyavihar University

Poorvi Pathak, Student, K J Somaiya Institute of Management, Somaiya Vidyavihar University

Citation Information: Yelamanchili, R., Wukadada, B., Jain, A., & Pathak, P. (2021). A study on consumers attitude towards online grocery shopping in covid19 pandemic. Academy of Marketing Studies Journal, 25 (S3), 1-10.

Online Grocery Shopping (OGS), t Customer Awareness, E-commerce, Consumer Behavior and COVID19.

Introduction

E-commerce has radically altered the business perspective worldwide. In a developing country like India, its impact has been more evident due to the rise in internet users (Chatterjee, 2016). With 225 million online shoppers presently, it is predicted that by 2025, there will be 530 million people shopping online (Chandra, 2021). This underscores the idea that the E-commerce industry would strengthen its hold in the Indian economy. Factors contributing to this phenomenon are increasing consumer spending, rising urbanization and more disposable incomes of the working population of India (Choudhury, 2017).

Online grocery shopping (OGS) is the form of shopping where consumers can order their groceries online, while being at home (Adamides et al., 2006). The idea of online shopping gathered traction from various disciplines in the last few years (Pan et al., 2017). It is gaining momentum due to the convenience it provides to customers (Martin et al., 2019). It started with the western and southern parts of India and has now spread across the country. Online grocery stores have low set-up costs since no physical stores are required and vendors reduce their inventory costs by providing fast-moving goods (Sinha et al., 2015). To be successful in this industry, e-retailers must have efficient transport, distribution and inventory management (Turban et al., 2015). The major Indian e-grocery retailers are Big Basket, Amazon Fresh, Grofers, and JioMart.

The organized retail trade includes supermarkets, retail chains and other licensed retailers (Sinha, 2017). Coula & Lapoule, 2012 reported how OGS avoids physically going to the stores, waiting in checkout lanes and carrying heavy shopping bags. Therefore, reducing physical effort by a huge margin. Research suggests that online orders include larger portions of fresh products than offline orders (Munson et al., 2017). Factors influencing the growth of online sale of groceries are

1. No geographical boundaries

2. Time efficiency

3. Free delivery and discounts

4. Current Pandemic

However, the coronavirus has disrupted the global economy as we know it. Its impact can be seen in almost every industry, including the manufacturing and FMCG sectors. When the lockdown was announced in India, it led to the closing of all the offline retail stores. In such a scenario, retailers with omnichannel presence could cope with the situation, albeit facing different challenges. They found themselves temporarily overwhelmed. As the restrictions were lifted, the e-grocers slowly started picking up. Overall, the e-grocers expanded manifold because consumers started to order groceries, packaged food and other essential items online. Likewise, Amazon and Flipkart saw an increment in groceries and daily-need items.

The paper aims to study the main elements affecting the acceptance and the intention to continue purchasing online ,which characteristic of the product or payment method can determine a higher frequency of OGS .Finally other studies examined the influence of the factors in the process of OGS .Existing literature is concentrated on impact on consumer behaviour in developing countries but very little is known about the acceptance ,the purchasing decisions and diffusion in developing countries.

Literature Review

The retail industry has been through a massive transformation over the past few years. Goswami & Mathur, 2011 explained how this tremendous change took place in India's retail industry. With so many choices available to the consumers and their changing lifestyles, there has been a diversification in the consumer demographics. People who prefer speed and convenience usually opt for online shopping (Yu & Wu, 2007). The younger population is at the centre of online shopping and hence, remains the focal point of studying consumer behaviour. One key aspect is how long they have been internet users, as more technically sound people would be more ardent e-shoppers (VA Sumathi et al., 2016). IAMAI, 2019 reported that more than 50% of internet users belong to 20-40 years. This group belongs to the working class, which an essential factor for an e-grocery shopper. Even though the younger population is more likely to go for online shopping, in the current scenario, people from all age groups are indulging in it because of changing customer mindsets (Mitra, 2018). A young and educated female who works long hours and earns a stable income living in a small household would purchase food online (Dominici et al., 2021).

Brand preference of OGS

Different e-retailers are competing in this industry, although Big Basket, Grofers and Amazon Fresh are the most prominent players. The strength of Big Basket lies in offering flexible delivery timings to the customers, but quality and prices should be maintained for its long-term growth (Upadhyay, 2019). It was reported that the number of Big Basket orders grew by three times since March 2020, as opposed to pre-Covid times, while customer retention has increased by 60% (Economic Times, 2021). This proves how this segment is growing exponentially and, in the future, will expand even more. People also prefer Amazon for online shopping due to its quick deliveries and highly convenient application, ultimately leading to a seamless shopping experience (Muralitharan et al., 2018).

Problems faced by Customers During OGS

Despite its advantages, OGS is not an optimal choice for the customers yet. Kaur & Shukla, 2017 outlined how they choose to purchase their groceries via online applications once or twice, but they do not prefer this medium when compared with their local stores and thus, their decision of OGS remains situation based. Goswami & Mathur, 2011 highlighted five main problems that customers face while shopping for groceries online: safety, product quality, no bargaining, and the need to touch and feel the item and delivery time. (Ramus & Nielsen, 2005)

Problems faced by Retailers in the OGS industry

The online grocery segment remains niche as it has many operational difficulties. Overall, the margins earned in the food and grocery segment have been low as retailers provide lower prices via discounts (Jhaveri & Anantharaman, 2016). It has slow sales growth compared to other sectors like electronics, consumer deliverables, cosmetics, etc. Meshram, 2020 analysed the impact of covid-19 on the online grocery retailers as they faced the out-of-stock situation with no labour and transport during the lockdown. This effectively derailed their supply chain management.

Objective and Hypothesis of the study

This study focuses on the consumers in Mumbai region and studies their acceptance and inhibitions towards OGS. Consequently, the broad objective is to study the consumer behaviors during COVID19 towards online grocery shopping. However, the specific objectives are as follows:

1. To understand the demographics of people going for online grocery shopping in the COVID19 situation

2. To examine the association between different demographic factors and preference of grocery shopping through online

3. To investigate the factors that can influence consumer’s intention to purchase grocery online

4. To find the problems faced by the customer during online grocery shopping

5. The study has following research hypothesis based on the above objective.

1Hypothesis : The preference for OGS has been increased after COVID19.

2Hypothesis : There is an association between age group and preference for OGS..

3Hypothesis : Ease of navigation is important aspect for the customer for OGS.

The present study is based on primary data collected through google form in Mumbai. Convenience sampling was used for data collection. The questionnaire contained questions on demographic information of individuals, information on preference of grocery shopping, different aspects for online grocery shopping, different brand preference for online grocery shopping and problems faced by customer during online shopping. Apart from these, questionnaire has questions on why people don’t go for online grocery shopping.

The total response for questionnaire were 380.

Statistical Analysis

Univariate analysis has been done to show percentage distribution of different demographic factor, preference of online shopping before lockdown, preference of online shopping after lockdown, frequency of buying, monthly expenditure on buying online grocery. Paired t- test has been done to show the significant change in preference of online grocery from before lockdown to after lockdown. Crosstabulation with chi-square is done to check association between demographic factors and preference of online grocery shopping. One sample t- test is used to check whether different aspects affect online grocery shopping. Different kinds of graphs are also used to get visual representation of results. The significance level is taken 5% for this study. All kind of analysis done with help of SPSS 25 and excel.

Sample Characteristics

Table 1 shows the sample characteristics according to demographics. Around 36% of respondents are less than age 25. The male respondents are more than female respondents. The proportion of married respondents are higher than single. 79% of respondents are working people. Only around 37% respondents have monthly income more than 50k. From Tables 2-4 , one can say that the number of people preferencing online grocery shopping has been significantly increased after COVID19.

Background Characteristics and Preference of Online Grocery Shopping

Tables 5-7 represents association with background characteristics with online grocery shopping preference. Around 85% of people of age group “25 plus year” prefer online grocery shopping Females are more likely to prefer for grocery shopping through online. Unmarried are less likely to go for online shopping than married. 32.3% of students prefer online shopping.

Factors affecting Online Grocery Shopping

Table 8 shows descriptive of factors affecting online grocery shopping. Around 44% people believe that prices are most important factors, while 7% believe that it doesn’t matter. 48% people say that Ease of navigation is important factor affecting online shopping and only 6.3% believe it doesn’t matter. 52.2% people found social distancing most important factor affecting online shopping, whereas only 1.6 % feel that it doesn’t matter. From Table 9 , all factors are significantly affecting online shopping.

Brand Preference

Table 10 shows brands preference of customer for online grocery shopping. The Big Basket is most preferred brand for online shopping with 78.43%. Amazon fresh is second most preferred brand having choice of 75.29% of people. Nature’s Basket is least preferred brand for grocery shopping with only 12.55%.

Problems during Online Shopping

Table 11 revels percentage of customer having different problems during online shopping. The most reported problem during online shopping is not availability of product. Delivery time is second most problem reported by customer with 43.9%. 3.1% customer faced problem during payment stage. 17.3% customers are not happy with customer services. Only 1.6% customer are not comfort with delivery charges.

Findings, Discussions, and Implications

Our study suggests that the number of people purchasing their groceries online has increased since the pandemic and social distancing is a significant reason for their online buying decision, as evident in (Kashyap, 2020) and (Jain & Sayyed, 2020). This answers our first hypothesis that preference for online grocery shopping has been significantly increased after COVID19. All the demographic factor of this study is significantly affecting preference of grocery shopping through online except income of person. This answer’s our all hypothesis regarding demographic factors.

In regards with hypothesis of influencing factors, the study found that discounted prices, Ease of navigation, product variety, peer recommendation, delivery fee, social distancing and same-day delivery attract the customers. This result is in line with research conducted by (Sathiyaraj et al., 2015), (Sreeram et al., 2017), and (Kian et al., 2018). Regarding customer apprehensions towards online grocery shopping (OGS) we deduced that product quality and high delivery cost are the common reasons. This supports the work of (Ramus & Nielsen, 2005), (Hanus, 2016) an (Mkansi et al., 2018).

The findings of this research have implications for the Indian retail industry, which includes e-commerce, government, researchers, and other stakeholders for increasing the adoption of OGS in the pandemic times regarding the Indian context. This study will offer insights to the grocery retail service providers in their day-to-day business and improve customer intention behavior using OGS.

Future Scope and Limitations of the Study

This study is conducted to acquire deeper insights into various antecedents of customers behavioral intention to adopt OGS.. There are limitations to this study that needs scholars to investigate the constructs in different geographical and consumer contexts which helps in generalizing the results.

The authors try to conceive a conceptual framework to understand the comprehensive insights on behavioral intentions of OGS users. Further, in this study, the moderating effect of demographic variables such as gender, age, income levels, and education were not tested which could be considered in the future studies concerning OGS adoption.

This study can be extended to other technical services such as mobile wallets, social media usage and more variety of products offered as services for developing markets like India. Future studies can also incorporate variables like social influence, status symbol, service quality and other facilitating conditions to get a broader perspective.

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Indian Online Grocery Market

Indian online grocery market report by product type (food grains, bread, bakery and dairy products, fruits and vegetables, personal care, dry and baking products, household products, beverages, meat and meat products, and others), payment method (online, cash on delivery), platform (app-based, web-based), and region 2024-2032.

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Indian Online Grocery Market Outlook 2024-2032 :

The Indian online grocery market size reached US$ 9.0 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 80.6 Billion by 2032, exhibiting a growth rate (CAGR) of 26.7% during 2024-2032. The rapid expansion of internet penetration and smartphones usage, increasing urbanization and busy lifestyles of consumers, outbreak of COVID-19 pandemic, wide availability of products on e-commerce platforms, and competitive pricing are some of the major factors propelling the market.

Online grocery refers to the process of purchasing food and other household items through digital platforms, typically via the internet. It allows individuals to browse a virtual supermarket and select items from a wide range of products available. Online grocery shopping offers convenience to consumers, thus eliminating the need to physically visit a store. They can also choose their desired products, make payments online, and have the groceries delivered to their doorstep. This mode of shopping has gained popularity due to its time-saving benefits, wider product selection, and the ability to compare prices. Online grocery platforms often provide features like personalized recommendations and convenient delivery options to enhance the overall shopping experience.

The rapid expansion of internet penetration and smartphone usage in India has opened up a large consumer base with access to online shopping platforms. Additionally, the increasing urbanization and busy lifestyles of consumers have led to a growing demand for convenient shopping options. Online grocery platforms provide the convenience of browsing and purchasing products from the comfort of one's home or office, saving time and effort. Furthermore, the COVID-19 pandemic has acted as a catalyst, accelerating the adoption of online grocery shopping due to social distancing measures and lockdowns. This has prompted consumers to switch to online platforms for their grocery needs. Another crucial factor is the availability of a wide variety of products, including fresh produce, pantry staples, and specialty items, on online grocery platforms. This diverse product range caters to the diverse needs and preferences of Indian consumers. Moreover, competitive pricing, discounts, and offers provided by online grocery platforms have attracted price-sensitive consumers, making online shopping a cost-effective option compared to traditional brick-and-mortar stores.

Indian Online Grocery Market Trends/Drivers:

Rapid expansion of Internet Penetration and Smartphone Usage

more people gain access to the internet and own smartphones, they have the means to explore and utilize online platforms for their grocery needs. With just a few clicks on their smartphones, consumers can browse through a wide range of products, compare prices, and conveniently place orders. This increased connectivity has bridged the gap between consumers and online grocery platforms, making it easier for them to access and utilize these services. The convenience and accessibility offered by smartphones and the internet have revolutionized the way Indians shop for groceries, fueling the growth of the online grocery market.

The onset of COVID-19 Pandemic

With social distancing measures and lockdowns, consumers have rapidly shifted toward online platforms as a safe and convenient way to meet their grocery needs. Other than this, the rising concerns about crowded physical stores and the need to minimize physical contact prompted consumers to explore online alternatives. This surge in demand forced online grocery platforms to expand their services, improve delivery logistics, and enhance their product offerings. The pandemic has also increased awareness and trust in online grocery shopping and established it as a preferred choice for many Indian consumers even after the pandemic subsides.

The increasing urbanization and busy lifestyles of consumers

As more people migrate to urban areas and adopt fast-paced lifestyles, the demand for convenient shopping options has grown. Online grocery platforms offer the convenience of shopping anytime, anywhere, without the need to visit physical stores. This aligns well with the busy schedules and time constraints of urban consumers. They can easily browse and order groceries from a wide range of products, saving time and effort. The online grocery market caters to the needs of urban consumers by providing a hassle-free shopping experience that complements their fast-paced lifestyles.

Indian Online Grocery Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Indian online grocery market report, along with forecasts at the regional levels from 2024-2032. Our report has categorized the market based on product type, payment method, and platform insights.

Breakup by Product Type:

• Food Grains
• Bread, Bakery and Dairy Products
• Fruits and Vegetables
• Personal Care
• Dry and Baking Products
• Household Products
• Meat and Meat Products
• Others  

Food grains dominate the market

The report has provided a detailed breakup and analysis of the Indian online grocery market based on the product type. This includes food grains, bread, bakery and dairy products, fruits and vegetables, personal care, dry and baking products, household products, beverages, meat and meat products, and others. According to the report, food grains represented the largest segment.

Food grains play a crucial role in driving the Indian online grocery market as grains such as rice, wheat, and pulses, are essential in Indian households. Online grocery platforms offer a wide variety of food grains, providing consumers with a convenient way to purchase these essential products. By offering a diverse range of grains, including different varieties and brands, online grocery platforms cater to the diverse preferences and dietary requirements of consumers. Moreover, the availability of food grains on online platforms ensures a steady supply, especially during times of scarcity or disruptions in traditional brick-and-mortar stores. This reliability and accessibility of food grains contribute to the growth and popularity of the Indian online grocery market.

Breakup by Payment Method:

• Cash on Delivery  

Cash on delivery hold the largest share in the Indian online grocery market

A detailed breakup and analysis of the Indian online grocery market based on the payment method has also been provided in the report. This includes online and cash on delivery.  According to the report, cash on delivery accounted for the largest market share.

In a country where digital payment adoption is still evolving, cash on delivery (COD) provides a convenient payment option for consumers. Many customers, particularly those who are skeptical about online transactions or lack access to digital payment methods, prefer the security and trust offered by COD. By offering the option to pay in cash upon delivery, online grocery platforms have been able to tap into a larger customer base, including those who are more comfortable with traditional payment methods. The availability of COD has boosted consumer confidence and facilitated the growth of the Indian online grocery market, making it accessible to a wider audience.

Breakup by Platform:

• Web-based  

App-based online grocery shopping accounts for the majority of the overall market share

A detailed breakup and analysis of the Indian online grocery market based on the platform has also been provided in the report. This includes app-based and web-based. According to the report, app-based accounted for the largest market share.

The app-based approach is driving the Indian online grocery market by providing a seamless and user-friendly shopping experience. With the proliferation of smartphones, dedicated mobile applications have become a convenient way for consumers to access online grocery platforms. These apps offer intuitive interfaces, personalized recommendations, and features like saved shopping lists, making it easier for users to navigate and make purchases. App-based platforms also leverage push notifications and alerts to keep customers informed about new offers, discounts, and delivery updates. The convenience and accessibility of app-based shopping have contributed to the growth of the Indian online grocery market, attracting tech-savvy consumers and enhancing overall customer satisfaction.

Breakup by Region:

• North India
• South India  

South India exhibits a clear dominance, accounting for the largest Indian online grocery market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North India, East India, West India, and South India. According to the report, South India accounted for the largest market share.

South India has a high population density, urbanization rate, and internet penetration, making it a fertile ground for online grocery platforms to thrive. South Indian consumers, known for their inclination toward technology adoption, have embraced the convenience of online shopping for groceries. The region's diverse culinary preferences and demand for specific regional products have also fueled the growth of online grocery platforms that cater to these unique needs. South India's contribution to the Indian online grocery market stems from its large consumer base, technological readiness, and market dynamics, making it a key driver of the overall industry growth.

Competitive Landscape:

The key players in the Indian online grocery market have implemented various efforts to drive its growth. They have focused on expanding their product offerings, partnering with local vendors to ensure a wide range of choices. Furthermore, the leading players have invested in building robust logistics networks and efficient delivery systems to provide timely and reliable services. To enhance customer experience, they have developed user-friendly mobile applications and websites with personalized recommendations. These players have also introduced attractive offers, discounts, and loyalty programs to incentivize customers. Moreover, they have increased their marketing and advertising efforts to create awareness and promote the benefits of online grocery shopping, further driving the growth of the Indian online grocery market.

The report has provided a comprehensive analysis of the competitive landscape in the Indian online grocery market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Aaram Shop Private Limited
• Amazon Retail India Pvt. Ltd,
• Godrej Nature’s Basket
• Blink Commerce Private Limited
• Innovative Retail Concepts Pvt. Ltd. (Bigbasket)
• Paytm E-Commerce Pvt, Ltd.

Recent Developments:

• Indian Council of Agricultural Research signed an MOU with Amazon Kisan to empower farmers guiding them through scientific cultivation of numerous crops for optimum yield and income.
• Tata-owned Innovative Retail Concepts, which operates FMCG business BigBasket, has received a Rs 1,000 funding injection in 2022. BigBasket has also launched a number of new delivery options, including its most recent launch BBNow, which offers deliveries in select metros in 10 to 20 minutes through the use of dark stores in strategic locations.
• Blink Commerce Private Companies are focusing on moving toward a sustainable future. Apart from replacing the delivery packaging, the company has also built up several sustainability programs for reduction in the packaging of private label products. With these programs, it aims to reduce the amount of plastic used in packaging products such as staples, atta, sugar, etc.

Indian Online Grocery Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Indian online grocery market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Indian online grocery market.
• The study maps the leading, as well as the fastest-growing, regional markets.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Indian online grocery industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market. 

Key Questions Answered in This Report

The Indian online grocery market was valued at US$ 9.0 Billion in 2023.

We expect the Indian online grocery market to exhibit a CAGR of 26.7% during 2024-2032.

The growing demand for online groceries over traditional shopping methods, as they offer various benefits, such as the availability of various payment options, fast delivery, and flexible return or exchange policies, is primarily driving the Indian online grocery market.

The sudden outbreak of the COVID-19 pandemic has led to the increasing consumer inclination towards online grocery stores to combat the spread of the coronavirus infection upon human interaction through brick-and-mortar distribution channels across the nation.

Based on the product type, the Indian online grocery market can be categorized into food grains, bread, bakery and dairy products, fruits and vegetables, personal care, dry and baking products, household products, beverages, meat and meat products, and others. Among these, food grains account for the majority of the global market share.

Based on the payment method, the Indian online grocery market has been segregated into online and cash on delivery, where cash on delivery currently exhibits a clear dominance in the market.

Based on the platform, the Indian online grocery market can be bifurcated into app-based and web-based. Currently, app-based holds the largest market share.

On a regional level, the market has been classified into North India, East India, West India, and South India, where South India currently dominates the Indian online grocery market.

Some of the major players in the Indian online grocery market include Aaram Shop Private Limited, Amazon Retail India Pvt. Ltd, Godrej Nature's Basket, Blink Commerce Private Limited, Innovative Retail Concepts Pvt Ltd (Bigbasket), Paytm E-Commerce Pvt. Ltd., etc.

India Dairy Market Report Snapshots Source:

Statistics for the 2022 India Dairy market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. 

• India Dairy Market Size Source
• --> India Dairy Market Share Source
• India Dairy Market Trends Source
• India Dairy Companies Source

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A business journal from the Wharton School of the University of Pennsylvania

Online Groceries in India: Will Consumers Bite?

May 7, 2015 • 12 min read.

The online grocery business in India is seeing high traction and is expected to grow to a multi-billion market. But the jury is still out on who will lead the pack.

U.K.-based Ocado, the world’s largest online grocery firm (or e-grocer), recently posted its first ever full-year profit. Ocado, which started operations in the year 2000, reported a pre-tax profit of £7.3 million ($11 million) on revenues of £948 million ($1.4 billion) for the 52 weeks ended November 30, 2014. In 2013, it reported a loss of £12.5 million. It has taken the company 15 years to deliver on its promise

In India, BigBasket, the country’s largest e-grocer which began operations in 2011, expects to break even in the next 36 months. It is already operationally profitable in its home market, Bangalore. “Labor and logistics costs are much cheaper in India than in western markets, so e-grocers here can make money faster,” says Hari Menon, BigBasket’s cofounder and CEO.

BigBasket currently has a kitty of over 10,000 products across 1,000 brands and over 450,000 active customers across five cities. It expects to close financial year 2014-2015 with revenues of around Rs. 250 crore (US$40 million). By December this year, the company plans to expand its presence to around five more cities. And over the next two years, it expects to grow to Rs. 1,800 crore (US$288 million).

India is the sixth largest grocery market in the world and one of the fastest growing markets for online groceries. According to industry estimates, of the $500 billion-plus retail market in the country, food and groceries account for the biggest chunk with around 70% market share. Of this, organized food and groceries is estimated to be around $12 billion and growing at a compound annual growth rate of around 30%. Research firm IGD predicts that by 2016, the Indian grocery market would have overtaken Japan to become the third largest. Meanwhile, India’s online grocery market, which is estimated to be less than $100 million at present, is expected to be worth billions in the coming years. “We anticipate it to cross $20 billion by 2020,” says Menon.

“Labor and logistics costs are much cheaper in India than in western markets, so e-grocers here can make money faster.” –Hari Menon

A 2014 U.S. Department of Agriculture (USDA) report notes that “the growth in India’s online retailing for food and groceries is a function of the rise in total Internet users from 120 million to 213 million in the past year as well as a fall in mobile handset prices and a rise in smartphone penetration.” Nitish Asthana, general manager at electronic payment firm First Data, adds that as consumers get more comfortable shopping online, they move to newer categories. “Consumers with busy lifestyles are opting for online grocers. We believe that the key point is the quality and range of products being offered at an attractive price and without the customer having to step out the door.”

Packed with Action

The potential is attracting a flurry of attention and action. Even as pure-play domestic e-grocers like BigBasket, ZopNow and LocalBanya are expanding their operations, horizontal e-tail biggies like Flipkart and Snapdeal have added gourmet and specialty food to their offering. Importantly, so has the global e-tail giant Amazon, which created waves last year when CEO Jeff Bezos announced a $2 billion investment for India.

“We launched the gourmet and specialty food store in October last year on Amazon.in. This is a reiteration of our commitment to relentlessly focus on building a place where customers can find, discover and buy virtually anything they want to buy online,” says Samir Kumar, director – category management at Amazon India. Pointing out that online grocery shopping in India is currently nascent, he adds: “We see potential in it, particularly for niche products like gourmet, organic food and specialty products which are not easily available. Customers should expect us to continue investing in expanding selection in this category.”

Amazon has been moving fast. In March this year, it launched Kirana Now , an express delivery platform in partnership with neighborhood stores. According to Amit Agarwal, vice president and country head of Amazon India, this is an “India specific innovation built particularly for the local market.” In a conversation with daily newspaper Times of India, Agarwal said: “These corner stores, which would be listed as sellers, will upload their catalogues online on our platform and we would help with the backend and technology.”

Amazon’s entry is expected to step-up action in the segment. “With Amazon’s deep pockets and experience with Amazon Fresh, it will [pose] a big challenge for BigBasket and other local firms,” says Kartik Hosanagar , an operations and information management professor at Wharton. Pragya Singh, associate vice president of retail at New Delhi-based research and consultancy firm Technopak Advisors, adds: “The entry of a player like Amazon will definitely pose a challenge for the incumbent players. However, food and grocery is relatively more complex than other categories. It will be interesting to see how competition in this space unfolds as more players enter it.”

It’s not just e-commerce players who want a piece of this pie. Leading brick-and-mortar Indian retailers like Reliance, Future, Godrej and the Aditya Birla groups are also making their moves.

For instance, in January this year, Godrej’s gourmet food chain Godrej Nature’s Basket which went online two years ago, tied up with Snapdeal and has listed over 700 products on it. In a press statement Mohit Khattar, managing director of Godrej Nature’s Basket, said: “We are thrilled to partner with Snapdeal.com. This is a huge opportunity for the brand to connect with all discerning customers who are currently not serviced by our offline and online formats.” Godrej Nature’s Basket, which was started in 2005 as a single store and has grown to 33 stores across multiple cities, has recently also acquired Mumbai-based e-grocer EkStop.

Venture capitalists, too, are upbeat on this space with BigBasket being the most favored one. The company has so far received around $60 million from various investors including Bessemer Venture Partners, Ascent Capital, Helion Ventures, Zodius Fund and LionRock Capital. According to Venture Intelligence, a research services firm focused on private equity and M&A deals, ZopNow’s investors include Accel India and Qualcomm Ventures while EkStop has received funding from Jungle Ventures and Unilazer Ventures. LocalBanya, which has raised $20 million so far in three rounds from Springboard Fund, realtor Karmvir Avant Group and others, is now reported to be looking to raise another $15 million.

A Different Recipe

Technopak’s Singh says that with nearly two-thirds of the retail market being food and grocery, it won’t be surprising if even more players eye this space. However, she adds a note of caution: Online grocery needs to be approached with a different level of preparedness. “The approach to online grocery needs to be more localized and hence their sellers and processes need to be aligned to local fulfilment. This is a different ball game than what is done in other categories.” Singh also believes that while the “traction in larger cities has been encouraging so far, for smaller cities the case still needs to be built.”

“With Amazon’s deep pockets and experience with Amazon Fresh, it will [pose] a big challenge for BigBasket and other local firms.” –Kartik Hosanagar

Snapdeal’s cofounder Kunal Bahl points out that supply chain, specifically temperature controlled storage, transport and delivery systems play a “pivotal role” in making the gourmet e-commerce ecosystem viable. “India has just begun to work in this direction and it will take time to move beyond the metro cities and reach the vast segment which has high purchasing power but lives in tier 2 and tier 3 cities,” he says.

According to Wharton’s Hosanagar, a key challenge is that grocery is a low-margin business. Specialty foods, he says, is better from a margin standpoint, but it still does not have the economics of, say, the apparel industry. “On top of it, there are logistics challenges, and the business needs a lot of capital investment. For it to be economically viable, one needs cart sizes that are big enough. This means that the product offering has to be broad. A [further] challenge in India is that since kirana [neighborhood] stores drop off groceries at home for no fee, grocery shopping isn’t as inconvenient as in the U.S. So the value proposition is a little weaker in India.”

K. Ganesh, serial entrepreneur and co-promoter of BigBasket, disagrees. Physical grocery retail in India, he says, is “broken and dysfunctional because of problems of high rentals, high shrinkage and high inventory costs.” And while Ganesh concedes that neighborhood stores do offer the advantage of quick home delivery, he points out that because of their very nature, these stores have limited offerings. “Most consumers have to do a fair bit of their grocery shopping at department stores. Heavy traffic on the roads and lack of adequate parking make this a very stressful experience. Put all this together, and there is a compelling case for e-grocery in India.”

Adds Menon of BigBasket: “If you look at the grocery buying pattern in the country, a typical urban Indian household does the bulk of its grocery shopping on a monthly basis. This is done primarily at department stores which offer variety and discounts. The shopping at neighborhood stores is mainly for top-ups.

What we are targeting at present is the shopping done in the larger stores. Over time, we hope to offer express delivery — within an hour or two — and get a share of the neighborhood stores also.” According to Menon, customers at BigBasket purchase at an average of 2.6 times a month. Through the use of analytics, Menon wants to push this up to four times a month. “It’s ambitious and requires a huge change of habit in our customers. But we believe that we will definitely get to three visits in six to eight months from now,” he says.

Margins Game

Ganesh and Menon also counter the argument about low margins in this business. According to them, margins can be as high as 22%. But this, they say, requires strong domain expertise in order to source and grade the products, as well as going deep into the supply chain and building strong relationships with farmers and mill owners and FMCG companies. “Building one’s own brand is also critical,” says Ganesh. He adds that unlike a horizontal play, where you can ship from a central location to the whole country, food and groceries is an extremely localized business. “One needs to understand the local nuances. It’s all about building local relationships, local buying, local logistics and building the business city by city.”

“Right now, it’s a growing market and there is place for everyone. But in time we will see a shakeout and mergers and acquisitions.” –Karan Maheshwari

Do large brick-and-mortar grocery chains have an advantage in their online avatars ? Not necessarily, says Singh of Technopak. “Their DNA is completely different. Just because you have inventory doesn’t mean you will succeed online. This business requires very different capabilities like expertise in analytics, digital marketing and so on. It also requires tremendous process discipline and lots of investment in technology.” Talking to daily newspaper The Economic Times, Amit Bhartiya, advisor at LocalBanya, noted that “offline players going online cannot make a mark if they do not offer competitive pricing and value.”

The jury is still out on what is the best model for this category in India. “A marketplace model that brings together a variety of sellers offering an assortment of products is most suited for this segment,” says Snapdeal’s Bahl. “The established offline stores can expand their reach through the e-commerce channel without actually having to build it. They have the expertise in handling such products, and marketplaces like ours have expertise in connecting them with customers outside their natural geographic markets.”

LocalBanya’s cofounder and CEO Karan Mehrotra points out that his model doesn’t require much infrastructure. In an interview with daily newspaper Business Standard , he says: “We connect with existing retailers and grocery stores. We do not compete with them. We work with them, adding the online channel to the existing vertical.” Ganesh thinks this category needs an inventory-led model. “Some of the players buy from large stores and supply to their customers, but this is not scalable,” he says, adding that since the ticket sizes are small, scale is critical to be successful in this business. BigBasket itself holds a 10-day inventory for all its products, except for fruits and vegetables. For these, it holds an inventory of less than two days.

What no one disputes however is the headroom for growth in the sector. “The more the number of players who enter this segment, the faster will be the growth,” says Bahl. He is also not worried about a player like Amazon with deep pockets and global expertise. Echoing the sentiments of others in the industry, Bahl says: “India is a very diverse country and a complex market. The effectiveness and efficiency in adapting to the Indian markets will define how any company will fare here.” Adds Karan Maheshwari, one of the early angel investors in EkStop: “Right now, it’s a growing market and there is a place for everyone. But in time we will see a shakeout and mergers and acquisitions.” Some of that has already started.

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Retail shopping preferences in India as of November 2023

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Preferred channels for online shopping in India as of June 2022

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Preferred platform for shopping on social media in India as of February 2023

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Most common services used to enhance shopping experience in India as of November 2023

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• Personal Finance

5 Ways Costco Online Shopping Is Worth the Price of Membership

Published on Aug. 25, 2024

By: Ben Gran

• Costco offers online shopping deals and discounts that can be worth more than the price of membership.
• Costco Direct gives you extra discounts of $100, $200, $300, or $400 when you buy multiple qualifying items at once.
• Get special savings on premium brands from Costco's online shopping partnerships via Costco Next.

Costco recently raised its membership prices, so you might be wondering if Costco is still worth it, especially if you don't live close to a local warehouse. Here's the thing: at the risk of sounding like an excessively impassioned Costco fanboy -- I believe that Costco membership is worth the price, even if you never set foot in a Costco warehouse.

Let's look at a few ways that Costco online shopping can help you get premium products and valuable services, while leaving more money in your bank account .

1. Special "treasure hunt" deals on Costco.com

Costco is famous for its "treasure hunts" where you can wander through the warehouse aisles and find surprising deals on furniture, appliances, tech gadgets, home goods, and more. But you don't have to go to a warehouse to get Costco treasure hunts -- they're offered online, too.

As of Aug. 18, 2024, Costco.com was offering the following "treasure hunt" deals:

• Cuisinart Tri-Ply Clad Stainless Steel 5-Piece Skillet Set ($69.99)
• Midea Smart 50-Pint Dehumidifier with Built-in Pump ($179.99)
• DeWalt Circular Saw ($199.99)
• Thomasville Dillard Accent Chair with Storage Ottoman ($599.99)

Costco.com also offers everyday deals on big-ticket items. If you're in the market for a new fridge, stove, sofa, or TV, check Costco.com and compare prices with other major retailers. You might often find better prices at Costco, and you can get built-in Costco technical support and a two-year warranty.

2. Grocery delivery from Costco Sameday

Costco has great deals on bulk groceries and packaged foods -- but what if you don't have time to visit the warehouse? Luckily, Costco offers online grocery delivery. You can sign up for Costco Sameday and use Instacart to shop at Costco for you.

Using Instacart at Costco will cost more than shopping at the warehouse yourself. But this can be worth it if you're pressed for time and just want to get those Costco grocery deals into your kitchen and pantry.

You can even use Costco Sameday to bring rotisserie chickens and big boxes of delicious Costco cookies to your house! That's worth $65 per year already.

3. Extra discounts from Costco Direct

If you buy big-ticket items online from Costco, you might qualify for extra discounts from a special program called Costco Direct. This is a perk that many shoppers might not know about, but it's great.

• If you buy two qualifying items, you get $100 of extra savings.
• If you buy three qualifying items, you save an extra $200 .
• Buy four items, save $300 .
• And if you buy five or more qualifying items, you can save an extra $400 on your total bill.

Costco Direct is online only, and it usually applies only to big-ticket items that have to be delivered, like appliances, furniture, or TVs. But if you're renovating a house, upgrading your living room, or suddenly need to replace multiple appliances at once, Costco Direct can help you save big.

4. Unique products from Costco Next

Costco has special online partnerships with premium brands through its Costco Next program. This is another little-known way to use Costco online shopping to get access to great deals on high-end products.

With Costco Next, you use your Costco membership to sign in to the Costco Next portal, and click on the brand you want to buy. Next you get taken to a special online shopping site where you can access special Costco member prices, and then you shop directly with the other brand.

Costco Next brand partners include:

• Body Glove (watersports gear)
• Dearfoams (cozy slippers and footwear)
• Most, Inc. (K-Beauty products from Korea)
• Otterbox (phone cases and screen protection)
• Priority Bicycles (low-maintenance bikes)
• Viking (cookware)

5. Book vacations with Costco Travel

Costco Travel is an online travel agency for Costco members, and it offers surprising deals on cruises, all-inclusive resorts, vacation packages, hotels, and more. If you want to try something totally new for your next vacation and you want the reassurance of Costco's seal of approval, Costco Travel can be a great way to book your trip.

Bottom line

Even if you live too far from a Costco warehouse to partake of the food court hot dog combo deal, Costco online shopping can be worth the price of membership. Just by shopping online on Costco.com and using Costco's special programs like Costco Direct and Costco Next, you can maximize your Costco experience without ever going to the warehouse.

Our Research Expert

Ben Gran is a freelance writer based in Des Moines, Iowa. He has written for regional banks, fintechs, and major financial services companies. Ben is a graduate of Rice University.

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