Online Grocery Market 2020 and Forecast 2021-2027

                                          
Report Overview: Online Grocery Market


The global online grocery market size was valued at USD 178.70 billion in 2020 and is projected to register a CAGR of 13.7% from 2021 to 2027. increase in disposable income and people’s increasing inclination toward comfort are anticipated to drive the market over the forecast period 2021-2027. Online grocery shopping is also gaining popularity among customers owing to the growing preference for a hassle-free shopping experience online. Furthermore, the outbreak of COVID-19 has led to an increase in the number of customers buying grocery online in order to avoid going to department stores and limit their social contacts. Although the impact of coronavirus has caused an upsurge in online grocery shopping across the world only recently, it is expected to change the consumers’ buying behavior and positively impact the market over the long term.

The shift toward online grocery shopping from traditional shopping methods is fueling market growth. According to the United Nations Conference on Trade and Development, global e-commerce sales reached USD 29 trillion in 2017. Furthermore, the total number of online shoppers worldwide reached 1.34 billion as compared to 1.20 billion in 2016. This number is bound to rise owing to technological developments that have led to the adoption of online platforms by various retailers as well as increase in disposable income among people in developing economies.


Rising number of smartphone users is expected to propel the market growth over the forecast period. Smartphones are widely used for online shopping owing to their ease of operation as they allow users to buy products over mobile applications. Major smartphone manufacturers are focusing on increasing their smartphone sales and are investing heavily in R&D to manufacture technologically advanced smartphones.

Internet of Things (IoT) helps retailers enhance customer experience and manage inventory efficiently. Increasing adoption of IoT by various retailers worldwide is anticipated catapult the market growth. For instance, in 2018, Walmart partnered with Microsoft Corporation to accelerate its digital transformation and provide a better shopping experience to its customers. According to the five-year deal between the two companies, Walmart will move a significant portion of samsclub.com and walmart.com to Azure to enhance customer’s online experience.

Lack of physical evidence of the products while shopping online is anticipated to hamper the online grocery market growth. Lack of trust regarding the freshness of products is also a major reason that restricts people from shifting to online grocery shopping. However, companies such as Amazon, Alibaba, and Target are focusing on overcoming this challenge by providing fast delivery and bigger discounts to attract customers.


Product Type Insights: Online Grocery Market

On the basis of product type, the market is segregated into fresh produce, breakfast and dairy, snacks and beverages, meat and seafood, staples and cooking essentials, and others. The staples and cooking essentials segment held a notable share of over 25.0% in 2019. This share is attributed to the repetitive shopping of staples that include food grains, flours, and essentials like oil that are fundamental requirements of many households in the Asia Pacific. Furthermore, changing lifestyles and increase in disposable income are paving the way for growth over the next seven years.


The breakfast and dairy segment is projected to expand at a CAGR around 13% from 2020 to 2027 owing to the growing demand for dairy products such as milk, yogurt, and curd. These products are a daily necessity for people and have a short lifespan as compared to other products. Furthermore, these products cannot be stored for a longer period of time and need to be consumed within a specific duration.

Regional Insights: Online Grocery Market

In 2019, North America held a substantial share in the overall market, contributing almost 15% in terms of revenue. This high share is attributed to the presence of several prominent players in the region and increasing e-commerce sales in U.S. According to the U.S. Census Bureau, e-commerce sales for retailers in the U.S. was valued at USD 461 billion in 2017 as compared to USD 397.3 billion in 2016.

Asia Pacific is projected to be the fastest-growing region with a CAGR of over 14.7% during the forecast period. This upsurge is due to initiatives taken by the government of India and China to promote digitalization and e-commerce in their respective countries. In 2015, the Indian government launched a Digital India campaign to empower the nation digitally. According to the India Brand Equity Foundation (IBEF), the number of internet users in the country is expected to increase from 636.7 million in 2019 to around 829 million by 2021.
Online Grocery Market Share Insights

The market is highly fragmented in nature and is characterized by a high degree of competition between major players. Some of the key players operating in the market are

 	
Walmart
 	
JD.com, Inc.
 	
Alibaba.com
 	
Amazon.com, Inc.
 	
Rakuten. 

These companies are focusing on strengthening their market presence by adopting inorganic strategies such as acquisitions, mergers, partnerships, and collaborations. For instance, in 2018, Walmart acquired 77% stake in Flipkart for USD 16 billion to expand its business in India.

Furthermore, Walmart announced its partnership with Rakuten in 2018, to launch its first e-commerce store in Japan in order to revamp its business in Asia. Additionally, in order to gain a competitive advantage in the market, companies are focusing on providing additional features to their solutions to leverage their product offerings and cater to the end-user requirements.

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global online grocery market report based on product type and region:

Product Type Outlook (Revenue, USD Billion, 2016 - 2027)

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