Online Grocery Market

Online Grocery Market Size:

The global online grocery market size reached US$ 549.4 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 5,533.9 Billion by 2032, exhibiting a growth rate (CAGR) of 29.26% during 2024-2032. The market is experiencing robust growth driven by the growing reliance on smartphones to browse the internet and shop from online platforms, rising utilization of artificial intelligence (AI) and machine learning (ML) to personalize shopping experiences, and increasing need for convenience.

Online Grocery Market Analysis:

• Market Growth and Size: The online grocery market is experiencing significant growth, driven by factors like increasing internet and smartphone penetration and evolving preferences for convenience.
• Major Market Drivers: Key drivers include advancements in technology facilitating easier online transactions and shifting behavior towards digital platforms. Additionally, the growing preferences for diverse and specialized product offerings, including organic and locally sourced groceries, is propelling the market growth.
• Technological Advancements: Online grocery retailers are utilizing artificial intelligence (AI) and machine learning (ML) for personalized customer experiences, efficient inventory management, and predictive analytics for demand forecasting. Advancements in logistics, like drone deliveries and enhanced supply chain management, are also notable.
• Industry Applications: The online grocery market serves a wide range of customers, ranging from busy professionals seeking convenience to health-conscious individuals looking for specific dietary products. It also caters to different segments, including households, businesses, and institutions.
• Key Market Trends: Trends include the rising popularity of subscription-based models for regular deliveries, the integration of eco-friendly and sustainable practices, and the emphasis on local and artisanal products.
• Geographical Trends: North America is the largest market, driven by tech-savvy consumers and the presence of major players. However, Asia Pacific is emerging as a fast-growing market due to rising internet usage and a rising number of online grocery delivery platforms. 
• Competitive Landscape: The online grocery market is highly competitive with various key companies. These companies are continually innovating in terms of technology, delivery models, and product range. The market also sees competition from local startups and traditional retailers expanding their online presence.
• Challenges and Opportunities: Challenges include maintaining the quality and freshness of perishables, managing efficient delivery logistics, and dealing with intense competition. Nonetheless, harnessing technology for improved customer experiences, expanding into untapped markets, and addressing the growing demand for sustainable and health-conscious food options are projected to overcome these challenges.
   

Online Grocery Market Trends:

Advancements in Technology and Logistics:

The rise in online grocery shopping is largely attributed to advancements in technology and logistics. With the integration of sophisticated e-commerce platforms, mobile applications, and user-friendly interfaces, people can now shop for groceries from the comfort of their own homes. These platforms offer features like personalized recommendations, easy navigation, and secure payment gateways, enhancing the overall shopping experience. Additionally, advancements in logistics are streamlining the supply chain, enabling faster and more efficient delivery. This includes the use of artificial intelligence (AI) for inventory management, predictive analytics for demand forecasting, and route optimization for delivery vehicles. These improvements are significantly reducing delivery times making online grocery shopping more convenient for consumers. The rise of last-mile delivery solutions, such as the use of local fulfillment centers and drones, is contributing to the online grocery market growth. These innovations help to reduce the costs and environmental impact of deliveries, further encouraging individuals to choose online grocery shopping.

Changing Buyer Behaviors and Preferences:

The shift towards online grocery shopping is also a reflection of changing buyer behaviors and preferences. With busy lifestyles, many individuals are looking for ways to save time, and online grocery shopping offers a convenient solution. The ability to shop anytime and anywhere, without the need to visit a physical store, appeals to a broad range of consumers, especially those with demanding schedules. The increasing health and safety concerns are prompting more people to opt for online shopping to minimize physical contact and exposure. Furthermore, online platforms offer a wider range of products, including specialty and international items, which are not always available in physical stores. This variety, along with the ability to easily compare prices and read product reviews, is making online grocery shopping an attractive option for consumers seeking quality and value. Numerous online grocery platforms also focus on providing discounts, cashbacks, and coupon codes to improve the shopping experience of people and attract a greater number of buyers regularly. Online grocery market revenue is experiencing significant growth due to changing consumer habits and technological advancements.

Economic and Market Dynamics:

The increasing penetration of the internet and smartphone usage is making online shopping more accessible to a larger population. This digital connectivity is opening new markets for online grocery retailers and expanding their customer base. Competitive pricing and promotional strategies employed by online grocery providers are also playing a significant role. Many online retailers offer competitive prices, discounts, and loyalty programs, which are attractive to cost-conscious consumers. The entry of major players into the online grocery space is intensifying competition, leading to improvements in service quality and innovation. This competition is benefiting people through better prices, more choices, and enhanced shopping experiences, thereby offering a favorable online grocery market outlook.

Convenience and Timesaving:

One of the primary drivers of the online grocery market is the convenience it offers. Individuals can shop from anywhere at any time, bypassing the need to physically visit a store. This is particularly appealing for those with busy lifestyles, families, or mobility challenges. Online shopping eliminates time spent in traffic, searching for parking, navigating aisles, and waiting in checkout lines. This time-saving aspect is a significant draw, especially for time-pressed consumers. The availability of various delivery options, including same-day delivery, scheduled slots, and click-and-collect services, adds to the convenience, catering to different consumer needs and preferences. Online grocery market demand is rising as consumers favor the convenience, time-saving, and varied delivery options offered.

Technological Advancements:

Technological innovations are playing a crucial role in the growth of the online grocery market. Enhanced e-commerce platforms with user-friendly interfaces make the shopping experience seamless. The integration of artificial intelligence (AI) and machine learning (ML) for personalized recommendations and predictive analytics in inventory management ensures product availability and timely restocking. Advanced logistics and supply chain technologies facilitate efficient and faster delivery services, improving the overall customer experience. Online grocery market value is increasing with technological innovations enhancing shopping, personalization, and supply chain efficiency.

Online Grocery Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on product type, business model, platform, and purchase type.

Breakup by Product Type

• Vegetables and Fruits
• Dairy Products
• Staples and Cooking Essentials
• Snacks
• Meat and Seafood
• Others
   

Staples and cooking essentials account for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the product type. This includes vegetables and fruits, dairy products, staples and cooking essentials, snacks, meat and seafood, and others. According to the report, staples and cooking essentials represented the largest segment.

Staples and cooking include grains, flour, oils, spices, and other essential cooking ingredients. The popularity of this segment stems from the universal need for these products in everyday cooking, coupled with the convenience of bulk purchases and regular replenishment. Online platforms often provide a variety of brands and price points, catering to a wide range of culinary needs and preferences. This segment caters to a broad consumer base as it includes basic items required by almost every household. Unlike niche products, staples and cooking essentials appeal to a wide range of customers, regardless of their dietary preferences or cooking habits. Products in this category often have a high repeat purchase rate due to their regular use and consumption. This creates opportunities for online grocers to establish long-term relationships with customers through subscription models or automated replenishment services.

The vegetables and fruits include a wide range of fresh produce, from common staples to exotic varieties. This category benefits from consumers seeking fresh, high-quality produce with the convenience of home delivery. Online platforms often provide a broader selection than what might be available in local stores, including organic and locally sourced options. However, challenges in this segment include maintaining freshness during transport and managing the short shelf life of these products.

The dairy products segment covers items, such as milk, cheese, yogurt, butter, and other dairy-based products. This segment attracts consumers looking for convenience, as well as those seeking specialty or artisanal dairy products not readily available in physical stores. Online grocery platforms must ensure proper cold chain management to maintain the quality and freshness of dairy products during storage and delivery.

The snacks segment in the online grocery market includes packaged snacks, confectionery, baked goods, and other ready-to-eat items. This segment benefits from impulse buying and the growing demand for convenient, on-the-go snack options. Online platforms offer a diverse range of local and international snack brands, often featuring new and unique products that appeal to consumers looking for variety and novelty.

The meat and seafood segment comprises fresh, frozen, and processed meat and seafood products. Consumers are increasingly turning to online platforms for these items due to the promise of quality, variety, and convenience. This segment requires robust cold chain logistics to ensure products remain fresh during transportation. Online grocery platforms often differentiate themselves by offering premium, organic, or sustainably sourced meat and seafood options, catering to health-conscious and environmentally aware consumers.

Breakup by Business Model:

• Pure Marketplace
• Hybrid Marketplace
• Others
   

Pure marketplace holds the largest share in the industry

A detailed breakup and analysis of the market based on the business model have also been provided in the report. This includes pure marketplace, hybrid marketplace, and others. According to the report, pure marketplace accounted for the largest market share.

The pure marketplace acts as a facilitator, connecting sellers with buyers without owning any inventory. This approach allows for a vast assortment of products, as the marketplace can host multiple sellers, including local vendors, big brands, and specialty stores. The key advantages of this model are its flexibility in product offerings and scalability, as it does not require the platform to maintain physical stock. The success of this model hinges on the ability of the platform to maintain a robust network of sellers and ensure a seamless and reliable shopping experience for customers.

The hybrid marketplace model combines elements of the pure marketplace with traditional retail operations. In this model, the online platform may own some inventory, especially of high-demand or staple products, while also allowing third-party sellers to offer their products. This approach provides greater control over inventory, ensuring consistent quality and availability of key items. 

Breakup by Platform:

• Web-Based
• App-Based
   

The report has provided a detailed breakup and analysis of the market based on the platform. This includes web-based and app-based.

Web-based platforms are accessible through internet browsers on various devices, such as computers, laptops, and smartphones. This platform is particularly popular among users who prefer a larger display for browsing and comparing products, or for those who may not be inclined to download and install additional applications on their devices. Web-based grocery platforms often provide a comprehensive view of products, detailed descriptions, and easy navigation. They are also beneficial for users who conduct research or compare prices across multiple sites. 

App-based platforms require users to download an application on their smartphones or tablets. This segment has seen substantial growth due to the convenience and speed it offers, especially for repeat purchases and regular users. Grocery shopping apps often provide a more personalized experience, with features like push notifications for deals, personalized recommendations, and the ability to quickly reorder favorite items. The app-based platform is particularly appealing to a tech-savvy, younger demographic that values the convenience of shopping on-the-go. Moreover, apps can utilize smartphone features like location services for more efficient delivery. 

Breakup by Purchase Type:

• One-Time
• Subscription
   

A detailed breakup and analysis of the market based on the purchase type have also been provided in the report. This includes one-time and subscription.

One-time purchase is the more traditional segment in the online grocery market. It involves customers making individual purchases as and when needed, without any commitment to future purchases. This segment appeals to consumers who prefer shopping based on immediate needs or specific occasions, allowing for flexibility and variety in their choices. It is particularly suitable for individuals who like to personally select items for each purchase or those who make infrequent or irregular grocery purchases. The one-time purchase model also caters to people who enjoy browsing different products and offers each time they shop. 

The subscription-based purchase segment is gaining traction in the online grocery market, particularly for staple items and regularly used products. In this model, people subscribe to receive certain products at predetermined intervals, such as weekly or monthly. This segment is convenient for individuals who wish to automate the replenishment of essentials, saving time and effort in repeated ordering. It is ideal for products that have predictable usage rates, like dairy products, baby care items, or even specialty coffee. Subscription models often offer benefits, such as discounted pricing, free delivery, or exclusive access to certain products.

Breakup by Region:

• North America
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
  • Turkey
  • Saudi Arabia
  • Others
     

North America leads the market, accounting for the largest online grocery market share

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa (Turkey, Saudia Arabia and others). According to the report, North America accounted for the largest market share.

The North America cloud backup market is largely driven by high internet penetration, widespread adoption of smartphones, and the presence of major e-commerce players. Additionally, the increasing variety of delivery options, including same-day delivery and curbside pickup, is making online grocery shopping more appealing. The growing demand for convenience and discounts is encouraging more people to opt for online groceries.

Asia Pacific stands as another key region in the market, driven by the integration of e-commerce with social media and the success of local platforms. The diverse cultural landscape in this region influences the range of products offered, with a strong emphasis on fresh and local ingredients.

Europe maintains a strong presence in the market, with a focus on providing organic and locally sourced food, offered through online channels. The presence of established grocery retailers adopting online models, along with emerging local startups, is driving competition and innovation in the market.

Latin America exhibits growing potential in the cloud backup market, fueled by increasing internet and smartphone penetration.

The Middle East and Africa region shows a developing market for cloud backup, primarily driven by the focus on improving logistics and infrastructure.

Leading Key Players in the Online Grocery Industry:

Key players in the online grocery market are actively engaging in various strategies to strengthen their market positions and cater to evolving consumer demands. They are heavily investing in advanced technologies like artificial intelligence (AI) and machine learning (ML) to enhance customer experience through personalized recommendations and efficient logistics. Top companies are expanding their product range to include a wider array of items, including organic and specialty foods, to appeal to diverse consumer preferences. Partnerships with local suppliers and the integration of sustainable practices are also a focus, aiming to attract environmentally conscious consumers. Furthermore, leading companies are exploring innovative delivery options, such as drones and autonomous vehicles, to improve delivery efficiency and reduce costs. These efforts demonstrate their commitment to innovation, customer satisfaction, and sustainable growth in the competitive online grocery landscape.

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

• Amazon.com, Inc.
• Carrefour
• Costco Wholesale Corporation
• Edeka Group
• HappyFresh
• Koninklijke Ahold Delhaize N.V.
• Reliance Retail Limited (Reliance Industries Limited)
• Safeway Inc. (Albertsons Companies, Inc.)
• Schwan’s Home Delivery
• ShopFoodEx
• Tesco PLC
• The Kroger Co.
• Walmart Inc.
• Wm Morrison Supermarkets Limited
   

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Latest News: 

• September 2022: HappyFresh announced that it will resume Indonesia grocery deliveries after getting new funding from investors.
• October 2023: Koninklijke Ahold Delhaize N.V. announced the 100% acquisition of Romanian grocery retailer Profi Rom Food SRL (Profi) from MidEuropa, which will double the size of Ahold Delhaize’s existing Romanian business.
• October 2023: The Kroger Co. announces the expansion of fresh food access with the acceptance of EBT payment for digital pickup and delivery orders across Kroger Family of Stores.

Online Grocery Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the online grocery market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global online grocery market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists 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 online grocery industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.