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How Online Grocery Shopping is Impacting our Buying Behaviour

The Indian grocery market size is valued to grow by USD 268.22 Billion from 2020 to 2025.

Growth of the Online Grocery Shopping Market

The Indian grocery market size is valued to grow by USD 268.22 Billion from 2020 to 2025.

The industry has already grown over the past 2 years. This is due to many external factors such as growing urbanisation, consumers becoming more and more tech-savvy, busier lifestyles, convenience seeking behaviour, covid restrictions, the declining data tariffs etc. Companies have also upped their game by creating more attractive offerings like no contact delivery and many online payment options. Particularly the companies that can leverage their scale such as big online platforms like Amazon, BigBasket, Grofers (Now BlinkIt) and more. The technological environment has improved and that has contributed to this boom. Now we have cheaper smartphones, increased internet penetration in the Tier-2 and Tier-3 cities, and improved digital payment infrastructure.

After the COVID-19 pandemic, the market grew even more because ordering online was not only convenient but also a safer option.

Impact on Consumers

We can see that with a steady increase in options customer loyalty has plummeted with buyers switching brands at unprecedented rates depending on which company gives the best offer. We can observe a clear increase in consumers' expectations from brands. Consumer behaviour in online shopping has moved towards "shoppertainment".

We can also see a trend of decrease in cart size with more frequent shopping. This means that there is more reactive shopping rather than planned. Social Media trends contribute a lot to this trend with eye-catching ads that prompt immediate purchases. Another effect of social media is that shoppers are becoming their own salespeople. Influencers add to this phenomenon.

So, what is the future?

Future of Online Grocery Industry

The Indian government is promoting the digital economy framework and digital literacy, which is why the industry will likely see another growth spurt.

According to Online Grocery Market in India 2021 by Netscribes, India. The online grocery market is expected to reach INR 1310.93 Bn by 2026, expanding at a CAGR of ~28.99% during the forecast period (2021-2026). In 2020, online grocery sales registered a growth rate of about 60%

Now, the online grocery industry is expected to be driven by consumers belonging to Tier-I cities. This is due to the wider availability of internet services, mobile phones and awareness of the services. The concerns related to the supply chain and workforce will improve as the government rolls out things one by one.

As this market grows, we are predicting that consumers will likely expect more. Big corporations like Amazon who have the resources to implement short delivery times will leverage their massive resources to keep reducing the time taken for grocery delivery. In many Tier-1 cities, we already have grocery delivery happening within an hour, even as less as 20 minutes. This will ultimately make consumers habitual to supreme convenience, which smaller companies will not be able to keep up with.

To keep up with larger corporations, smaller players will need to come up with innovative solutions to delight consumers in ways that don't require a large network. The other option is to partner up with delivery firms that offer faster delivery. The strategy would depend on your company goals and target consumer research.

For the best insights into your consumers, Aeon offers customised insights with data collection services. We have a vast network all across the country and over 10 years of experience in the field of knowing customers. Reach out to us to know more.


Published On - February 26, 2022