The largest consumer segment in India by far is grocery. Indians spend 50% of their monthly income on buying grocery, making it a must-capture space for retailers. Grocery is a hyper-local business in India and hence it is but natural for e-retailers to capture this market once they have set up a strong delivery service and strong customer base. Compared to the grocery retail market in India (around USD 400 Bn currently) the online grocery market in India is still small. Currently it is at a valuation of USD 500 Mn, with a potential to cross USD 3 Bn in the next five years.

It is not just the size of the market, but its potential grow that is attracting e-retailers to the online grocery market. Groceries are an essential purchase for every household and needs to be bought at regular intervals. People need them regularly and consumers do not put in much thought to it while buying. Hence players who can capture the customers’ mind and wallet share can have an edge over the others and would become the default e-retailer for most of the consumers in India.

Big players in online grocery retail

Online grocery market in India attracts the most profitable consumer base—dual income households, customers with high lifetime value, and customers who prioritize convenience or cost. There are big e-commerce players that are battling to capture the online grocery space in India:

Amazon factor:

The vision of Amazon is to transform the way India buys and sells. Amazon wants to establish itself as the everyday e-store for customers and in order to do that they have launched their grocery offering since June 2016 and ensured that customers have a hassle-free experience. Amazon Pantry focuses on weekly and monthly stock-up shopping with emphasis on increased customer savings. Amazon has established 15 specialized fulfillment centers specifically for daily essentials in order to increase the speed of delivery. Amazon has also come up with monthly promo offers for their grocery shopping.

Expanding the Basket:

BigBasket has been one of the established major players in the online grocery market in India. In spite of the growing competition from Amazon, BigBasket remains unfazed as it believes that competition will only expand the market. BigBasket currently delivers 70,000 orders per day across 25 cities, holding on to their strong position in the online grocery space.    

With Walmart, the largest retailer in the world, tying up with Flipkart the online grocery is going to be further fraught with competition in the recent future. Big players like Grofers, BigBasket and Amazon are constantly competing with each other to monopolize their presence in the online grocery space.

New business ideas such as a foray into the physical space with the help of vending machines for residential apartments and office complexes has been experimented with in the recent past. This move is expected to increase the frequency of buying by customers in a marked way.          

Check out the Research on Global Markets report featured in this article:

Online Grocery Market in India (2018-2023)
April 2019 | 50-60 Pages | SKU: 2018119