Online grocery market in India

Abstract

Groceries are one of the basic needs in everyone’s life. People can stay without good clothes, with technological problems but cannot spend a day without proper food and hence the grocery market has always been either steady or growing. Until a decade back the need for daily grocery was fulfilled by local kirana store (mom & pop store) or hyper-local market/supermarket. However, with advent of technology and urbanization, several start-ups are opening online grocery stores to serve consumer’s demand of grocery and at the same time providing them advantage of home delivery and relaxation from standing in long billing queues. Currently, most of the online grocery stores are located in Metro and Tier-I cities, but with increasing incomes and urbanization, they are slowly expanding to TierII cities as well. The need for online grocery has emerged because of change in working conditions over the last decade with both partners working for long hours. Also, with urbanization and soaring land prices, it has become difficult to find large amount of land within cities like Mumbai, Delhi to open large stores. Hence, the new hyper-local markets are being opened in outer areas resulting in the increased distances that one has to travel to get to hyper-local store. This coupled with long billing queues leave little time for people to shop on stores. Apart from this, the ubiquitous presence of Internet has made it possible for the grocery stores to go online and has resulted in growth of e-tailing. Although, from outside the industry for online grocery looks very attractive, however not many start-ups in this domain were able to survive leaving few players in the market. This report covers three major aspects of this industry including attractiveness of this industry, challenges and opportunities for the current online players and how offline retail giants like More, Reliance fresh can build their brand in online grocery space.