With the market charting an annual growth rate (CAGR) of 57%, the online grocery business is expected to reach $18.2 billion by 2024
The total size of the e-grocery market in India is expected to grow from $1.9 billion in 2019 to $3 billion by year-end
E-grocery is fast emerging as the next battleground as e-commerce majors Walmart-owned Flipkart and Amazon India ramp up their grocery business with faster expansion to more cities and satellite towns, fresh investments and more warehousing space.
As the pandemic pushed customers to go digital, online grocery firm and market leader BigBasket saw a spurt in business even as new entrant JioMart only made the space more competitive.
Flipkart Supermart, the homegrown e-commerce firm's grocery business, which is currently in five cities and satellite towns will expand to another 4-5 cities in the coming months. It will also scale up its presence to 15-16 satellite towns.
Earlier this week, Walmart and Flipkart invested another $30 million in Ninjacart, a fresh produce supply chain startup, to boost its online grocery service Supermart and Flipkart Quick, its hyperlocal delivery service.
“Grocery is the next big frontier for online shopping and is instrumental for us to bring customers online. We have made significant investment in the grocery business. Gearing up for the peak demand season, we have scaled up the grocery category and revamped warehousing capability," Manish Kumar, senior vice-president-grocery, Flipkart said in an interview.
Flipkart’s Kumar said that e-grocery has its own challenges and is an operations heavy category, that entails problem solving on a city-by-city level and needs adequate cold storage and last mile delivery processes.
The total size of the e-grocery market in India is expected to grow from $1.9 billion in 2019 to $3 billion by year-end, according to a September report by consulting firm RedSeer and BigBasket.
With the market charting an annual growth rate (CAGR) of 57%, the online grocery business is expected to reach $18.2 billion by 2024.
While Flipkart launched Supermart in November, 2017 with a phased launch in five cities, Amazon Fresh was launched last year.
Amazon Fresh, the e-commerce firm’s grocery business, has scaled up faster and is now available to customers in nine cities and is scaling up in Kolkata, Ahmedabad and Pune.
“Our mission is to make online grocery shopping rewarding, fast, convenient and safe for our customers through various programs like Amazon Fresh and Pantry. We are consistently widening our selection of daily essentials making them available for customers throughout the country with our growing infrastructure capacities. We will soon make Amazon Fresh available to customers in more cities," said Siddharth Nambiar, director – category management, Amazon India.
Amazon Fresh offers around 5,500 fruits and vegetables, dairy, ice-creams and dry grocery like staples, packaged food, personal care and home care and has a two-hour delivery services.
While Flipkart Supermart offers next day delivery, its recently launched hyperlocal service Flipkart Quick has a 90-minute delivery system. The latter also delivers grocery, meat, fresh dairy/mobiles, fruits and vegetables/stationery, electronic accessories and stationery.
With Ninjacart as a supply chain partner, Flipkart Supermart is also planning to venture into fresh fruits and vegetables after running a pilot in Hyderabad.