eGrocery to grow 8X in 5 years in India, JioMart big gainer
As companies from Reliance to BigBasket put their top dollar in serving daily grocery at your doorsteps, online grocery is going to be the next battleground for growth, expanding to over $18 billion by 2024.
New Delhi: As the e-commerce battle intensifies in India, with Reliance Retail’s JioMart being the latest major entrant with a massive potential to disrupt the space, the next big thing is the delivery of groceries online and the market size is estimated to grow eight times in the next five years in the country.
As companies from Reliance to BigBasket put their top dollar in serving daily grocery at your doorsteps, online grocery is going to be the next battleground for growth, expanding to over $18 billion by 2024.
The eGrocery market has grown 60 per cent from the calendar year 2020 and is expected to grow 41-49 per cent by the first half of CY21, according to the latest data provided by homegrown consulting firm RedSeer.
Another recent report by Bengaluru-based RedSeer and Bigbasket (Brand Intelligence) found that demand for comfort foods like noodles and cookies, immunity boosters such as lemon, and hygiene products like sanitisers picked up after the pandemic while essentials remained strong.
Within snacks and branded foods, biscuits and cookies were the largest sub-category and grew the most.
“We have observed that traditional brands which pivoted quickly to be digitally ready brands have seen 2x+ jump in sales compared to offline brands,” said Anil Kumar, founder and CEO of RedSeer.
Now, JioMart is set to take the pole position in online delivery of groceries.
“Grocery is the largest retail category. This makes it an important category for retailers and one that is going to drive future growth of online retail sales. JioMart will definitely be a key player in the months to come,” said Satish Meena, Senior Forecast Analyst with global market research firm Forrester.
Driven by the uptick in online grocery adoption due to the Covid-19 pandemic, “online retail sales will grow at a CAGR of 30 per cent from 2019 to 2024 and reach $359 billion”, Meena informed.
India is witnessing a surge in demand for online grocery. The latest Reliance takeover of Future Group’s retail business is a major consolidation of organised grocery retail. In terms of grocery retail, the revenue of Reliance Retail in FY20 was Rs 346 billion and that of Future Retail’s annualised revenue for FY20 was Rs 100 billion.
According to Meena, grocery will also be the category where most marketplaces’ investments will be made in the next five years.
Reliance Jio’s new commerce platform JioMart and Whatsapp will be working closely to create growth opportunities for millions of Indian small merchants and kirana shops, Reliance Industries (RIL) Chairman Mukesh Ambani said recently.
In India, there are more than 15 million monthly WhatsApp Business app users, and more than 400 million overall users. Reliance aims to integrate JioMart in WhatsApp within the next six months.
The Covid-19 induced lockdowns and social distancing led to a surge in online orders for groceries, driven by utility as 80 per cent of those who ordered online during lockdown did it for convenience as opposed to price and selection.
According to a survey by LocalCircles, 52 per cent online grocery shoppers found the e-commerce grocery apps useful during lockdown. As many as 32 per cent online grocery shoppers placed one or more orders every week during the lockdown while 38 per cent found fruits and vegetables delivered via e-commerce grocery apps to be of poor quality.
A recent Bernstein report said that Reliance is “best positioned in new commerce, digitising neighbourhood stores, and e-commerce apps (JioMart and AJIO)”.
