How Big is the Online Grocery Market? 

India’s online grocery market attained a value of USD 2.2 billion in 2020 

The online grocery market in India is projected to reach USD 2.2 billion by 2020, and the market will continue to grow in the coming years. Growth will be fueled by a younger consumer base, who are willing to spend more for high-quality food. Additionally, the rise of women in the workforce will provide impetus to the grocery industry. 

(Searching in Google “Online Marketing Software“? Contact us today!)

The growth of the online grocery market in India is being driven by factors including increasing internet penetration and increasing digital awareness. There are currently more than 430 million internet users in the country, and the number of users is projected to rise to 635 million by 2021. Further, the availability of cheaper smartphones, the decline of data tariffs, and the increased use of digital payment methods are expected to boost the industry’s growth. 

While cash is a popular method of payment for online grocery transactions in India, some consumers still prefer to use offline payment methods. In addition, the use of cash-on-delivery has helped merchants increase their reach to rural customers. Moreover, this method also reduces the possibility of payment loss, which can occur in offline payment methods. This, in turn, has increased the adoption of the online grocery market in India. 

Europe’s online grocery market accounted for above 30% share in 2019 

According to a recent Forrester report, Europe’s online grocery market is expected to grow at a CAGR of over 30% in 2019. Leading retail grocery chains such as Waitrose & Partners and Lidl are bolstering regional growth. Convenience is the top reason consumers choose to buy groceries online. 

However, barriers to a safe online shopping experience persist. Consumers may be tempted to order food online, only to find out that their order was not delivered to their homes. This scenario highlights the need for a more convenient and secure way to purchase groceries. For instance, many countries are conditioning store hours to include dedicated hours for vulnerable groups. Eventually, these dedicated hours could extend to home delivery as well. In addition, grocery retailers will need to improve their processes for identifying vulnerable shoppers. Current approaches are inconsistent and ad hoc. 

As a result of the growing popularity of online grocery shopping, leading grocery retailers in Europe are increasing their delivery capacity. J Sainsbury PLC, for example, has announced plans to add a further 1,000 online delivery vans to the UK by September 2020. With this expansion, the company will be able to process over 700,000 online grocery orders each week. Additionally, Morrisons, Tesco PLC, and Asda Stores Ltd. have also extended their delivery times to accommodate more customers. 

Subscription-based purchase model poised to register a growth of more than 30% through 2026 

The subscription-based purchase model is rapidly gaining popularity with consumers. However, many traditional retailers have been unable to make the transition. They struggle to launch and nurture a new line of business in a new channel, and often experience failure along the way. This destroys value and damages reputations. To build a successful subscription-based business, retailers must take a more strategic approach to this new business model. 

A subscription program can personalize the customer experience, offer recurring revenue, and foster customer loyalty. For example, the athletic apparel brand Fabletics offers a VIP membership program. Customers who become members receive curated collections, exclusive discounts, and free shipping. Such personalization helps consumers feel closer to a product and also cuts the stress of the purchase. Moreover, subscription services allow DTCs to avoid the complexities of marketplaces and retailers and focus on their products. 

While the OTT industry has seen an overall decline in sales, the subscription video and audio-on-demand (SVOD) industry is expected to grow at a faster rate. The SVOD market is expected to surpass $100 billion in revenue by 2025. Top audio streaming services, such as Spotify, Pandora, and Amazon music, have seen a YoY growth of more than 30% in their ad revenues during 2020.