Online Grocery Market Research, 2032
The global online grocery market was valued at $258.6 billion in 2022, and is projected to reach $965.4 billion by 2032, growing at a CAGR of 14.3% from 2023 to 2032.
Market Dynamics
The online grocery market refers to the digital platform where consumers can purchase various food and household products over the Internet. This digital marketplace offers convenience, a wide product selection, and time-saving benefits to consumers.
The online grocery market has witnessed numerous recent developments that are focused on improvement and enhancement of online grocery delivery services. One of the major industry players such as Amazon, which operates as Amazon Fresh, an online grocery company, has invested largely in the Indian market. Furthermore, the market has seen partnerships as the popular choice among the companies for expanding their market presence and businesses. Companies come together to deliver better services to their customers by utilizing each other's existing market capabilities and technologies due to high competition among key online grocery providers, which surge the online grocery market size.
In addition, companies have invested in their customer fulfillment centers to enhance their consumer convenience. Companies are focusing on integrating new and advanced technologies for speeding up online grocery delivery. The online grocery market is gaining popularity due to its time-saving and convenient nature, as online grocery provides efficient solutions for grocery shopping. Online grocery services help consumers with ordering items from their home without going to a physical store and waiting in long lines at checkout, results in online grocery market growth.
This easy and hassle-free experience attracts customers, contributing to the rapid growth of the online grocery market. There has been an increase in the market demand for online groceries owing to technological advancements. In addition, factors such as continuous improvement in e-commerce technology, mobile applications, and logistics make way for user-friendly and efficient shopping experience for customers. Secure payment gateways and streamlined delivery systems increase trust and offer convenience, thus attracting more consumers toward online grocery shopping. Such factors boost the online grocery market demand.
An increase in internet penetration also contributes to the market demand for online groceries. The potential market for online grocery is expanding in a diverse range of customers from various demographics with the increasing accessibility of the internet. Moreover, there has been a significant change in consumer buying behavior, with growing comfort and trust in online transactions. As a result, the convenience of online shopping propels the online grocery market share.
The availability of a wide range of products on online platforms is a key factor driving the market growth of the online grocery market. Online grocery platforms offer a wide range of products and different brands, including specialty products, international goods, and dietary options, which are not always available in traditional brick-and-mortar stores. This diverse range of choices attracts customers with unique preferences, leading to increased consumer interest in shopping online.
Urbanization has fueled the market demand for the online grocery industry, as online grocery platforms offer time-saving benefits, a wide range of products, and doorstep delivery, making them attractive options for the urban population. In addition, the availability of high-speed internet and smartphones further facilitates the adoption of online grocery shopping, boosting market growth.
There is an increase in the demand for online grocery due to the shift in last-mile delivery solutions and effective promotional strategies. Improved last-mile delivery options, such as using delivery drones, automated vehicles, and small warehouses, which ensure faster and more reliable deliveries, attracting more customers. In addition, online grocery retailers employ promotional strategies like discounts, cashback offers, and loyalty programs to offer unique shopping experience and foster customer loyalty. These tactics enhance the overall shopping experience, encouraging people to opt for online grocery shopping.
Subscription models and membership programs play a significant role in surging the growth of the online grocery industry. Online grocery retailers attract and retain customer loyalty by offering subscription-based services or membership programs. Subscription models provide customers with the convenience of regular deliveries of essential groceries and household items. By subscribing to a specific plan, customers receive their preferred products at scheduled intervals, eliminating the need for repeated order placements. This streamlined and hassle-free shopping experience enhances customer satisfaction and encourages repeat purchases, leading to increased market demand.
Membership programs offer exclusive benefits, such as free deliveries, special discounts, and early access to promotions, to members who opt for paid memberships. By implementing these models, online grocery retailers create a sense of loyalty and reliability among customers, making them likely to choose their platform over other competitors.
Segmental Overview
The online grocery market forecast on the basis of product type, delivery type and region. By product type, the market is classified into fresh produce, staple and cooking essentials, RTE food, snacks and beverages, bakery and confectionery, dairy products, breakfast and cereal, household and, cleaning products, beauty and personal care, baby food and care. and pet food and care. By delivery type, the market is segmented into instant delivery and schedule delivery. Region-wise, the market is analyzed across North America (U.S., Canada, Mexico), Europe (Germany, France, UK, Russia, Spain, Italy, and Rest of Asia-Pacific), Asia-Pacific (China, India, Japan, Australia, South Korea, and Rest of Europe), and LAMEA (Brazil, South Africa, Saudi Arabia, UAE, Argentina, and Rest of LAMEA).
By Product
Based on product type, the fresh produce segment held the highest market share in 2022, accounting for more the one-fifth of the global online grocery market revenue and is estimated to maintain its leadership status throughout the forecast period. Personalized recommendations and subscription services for fresh produce also surge the market demand for the fresh produce segment in the market. However, the RTE food segment is projected to manifest the highest CAGR of 15.2% from 2023 to 2032, due to consumers increasingly seeking quick and hassle-free solutions for their busy lifestyles. Health-conscious RTE choices, including organic and plant-based options, are also gaining popularity.
By Delivery Type
Based on Delivery type, the scheduled deliveries segment held the highest market share in 2022, accounting for nearly two-third of the global online grocery market revenue and is estimated to maintain its leadership status throughout the forecast period. Consumers are opting for scheduled deliveries that align with their preferred time slots, accommodating busy schedules and reducing waiting times. However, the polyester segment is projected to manifest the highest CAGR of 14.5% from 2023 to 2032. The market trends of instant delivery in the online grocery market include a growing preference for quick and on-demand grocery services.
By Region
Based on region, North America held the highest market share in terms of revenue in 2022, accounting for more than one-third of the global online grocery market revenue, due to increase in consumers' preference toward convenience and time-saving shopping experiences has fueled the growth of online grocery platforms in this region. However, the Asia-Pacific region is expected to witness the fastest CAGR of 15.4% from 2023 to 2032. In the Asia-Pacific region, online grocery market trends include rapid growth driven by increasing internet penetration and smartphone adoption.
Competition Analysis
The major players operating in the market focus on key market strategies, such as mergers, product launches, acquisitions, collaborations, and partnerships. They have also been focusing on strengthening their market reach to maintain their goodwill in the ever-competitive market. Some of the key players in the online grocery market include Rakuten Group, Inc., Reliance Retail Limited, Amazon.com, Inc., Walmart Inc., The Kroger Co., Albertsons Companies, Inc., Tesco PLC, Woolworths Group Limited, J Sainsbury plc., and Target Corporation.
Recent Developments in the Meat-Based Flavor Market
- In July 2023, Woolworths Group Limited launched application, MILKRUN in New Zealand. This applications will allow consumers to order items in few minutes and will offers ultra-convenient experience.
- In Feb 2023, The Kroger Co., opened new facility in South Florida, U.S., to expand its delivery services business.
- In Feb 2023, Amazon.com, Inc., invested in FreshToHome which is an online grocery startup. Through this investment it will expand its market share in perishables for customers in India and UAE.
- In Jan 2023, J Sainsbury plc., partnered with Just Eat Takeaway, which a online food delivery company. Through this partnership it will provide faster home delivery for groceries.
- In April 2023, Woolworths Group Limited partnered with Takeoff Technologies, which offers micro-Fulfillment eGrocery solutions. With this partnership it will enhance customers online shopping experience.
- In March 2023, Amazon.com, Inc., expanded partnership with Rite Aid, to offer Amazon's Prime Members two hour delivery. This will include cosmetics and groceries.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the online grocery market analysis from 2022 to 2032 to identify the prevailing online grocery market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities according to online grocery market statistics.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the online grocery market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global online grocery market trends, key players, market segments, application areas, and market growth strategies.
Online Grocery Market Report Highlights
| Aspects | Details |
 Market Size By 2032 | USD 965.4 billion |
 Growth Rate | CAGR of 14.3% |
 Forecast period | 2022 - 2032 |
 Report Pages | 300 |
 By Product Type |
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 By Delivery Type |
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 By Region |
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 Key Market Players | J Sainsbury plc., Albertsons Companies, Inc., Rakuten Group, Inc., Amazon.com, Inc., Tesco PLC, Woolworths Group Limited, Walmart Inc., Target Corporation, The Kroger Co., Reliance Retail Limited |
Analyst Review
According to CXO insights, several factors are driving the growth of the online grocery market. There is an increase in number of consumers opting for online grocery shopping, due to their growing preference towards convenience. More individuals find it easier and appealing to shop for groceries on the internet with changes in customer preferences. Moreover, technological advancements have improved the overall online shopping experience, making it user-friendly and efficient.
The availability of a wider product selection and the ease of comparing prices across various platforms have also contributed to the expansion of the market. Moreover, the COVID-19 pandemic has further accelerated the growth of the online grocery market as consumers turned to online options to avoid physical stores. In addition, investments made by retailers and e-commerce companies in expanding their delivery networks and improving last-mile logistics have played a major role in the growth of the online grocery market.
Subscription models and membership programs are the upcoming trends of Online Grocery Market in the world
Schedule Delivery is the is the leading delivery type of Online Grocery Market
North America is the largest regional market for Online Grocery
The global online grocery market was valued at $258.6 billion in 2022, and is projected to reach $965.4 billion by 2032, growing at a CAGR of 14.3% from 2023 to 2032.
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