As giants like Reliance and Amazon intensify their efforts to deliver daily groceries to consumers’ doorsteps, a recent report highlights online grocery as the emerging battleground for growth in India, projected to exceed $18 billion by 2024.
A joint initiative by Bengaluru-based market consulting firm RedSeer and Bigbasket (Brand Intelligence) reveals the remarkable trajectory of eGrocery, spurred by a significant surge in organic adoption during the Covid-19 pandemic. In June this year, online grocery witnessed a staggering 1.7 times increase in gross merchandise value (GMV) compared to January, signaling its rapid ascent.
The report forecasts a steady growth trajectory for online grocery, projecting it to surpass $3 billion by the end of the year. Hari Menon, co-founder and CEO of BigBasket, notes, “The industry has seen more than 70 per cent ARR (annual recurring revenue) jumps in the last quarter across categories. This brings the opportunity to serve a larger set of customers, and some challenges with it.”
Amid the pandemic, consumer preferences shifted towards comfort foods like noodles and cookies, alongside increased demand for immunity boosters such as lemon and hygiene products like sanitizers. Notably, essentials maintained robust demand throughout the period.
Key findings from the report indicate a substantial growth surge in various categories. Snacks and branded foods, which witnessed a 5 per cent quarterly growth pre-Covid, skyrocketed to 75 per cent in the June quarter. Biscuits and cookies emerged as the largest sub-category within this segment, experiencing the most significant growth in Q2.
Similarly, beverages recorded a remarkable growth spurt, with a 50 per cent increase in the June quarter compared to a modest 2 per cent growth pre-Covid. Personal care products also witnessed a notable uptick, surging from a 5 per cent quarterly growth pre-Covid to 24 per cent in Q2.
Anil Kumar, founder and CEO of consulting firm RedSeer, highlights the success of digitally agile brands, noting a significant sales surge compared to offline counterparts. The report underscores the resilience of home utilities, which, despite modest growth compared to other categories, remained relatively unaffected by the pandemic.
In conclusion, the report sheds light on the dynamic landscape of India’s online grocery market, poised for substantial growth and innovation as industry players navigate evolving consumer preferences and market dynamics.
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