NEW YORK, Nov. 11, 2024 /PRNewswire/ — Report on how AI is redefining market landscape – The global online grocery market size is estimated to grow by USD 1.65 trillion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  21.48%  during the forecast period. Increased popularity and adoption of e-commerce platform is driving market growth, with a trend towards growth in demand for functional food and beverages. However, end-user perception of online grocery shopping  poses a challenge.Key market players include Albertsons Companies Inc., Amazon.com Inc., Blink Commerce Pvt. Ltd., Bundl Technologies Pvt. Ltd., Coles Group Ltd., Costco Wholesale Corp., Flipkart Internet Pvt. Ltd., HOFER KG, Innovative Retail Concepts Pvt. Ltd., Koninklijke Ahold Delhaize NV, Ocado Group Plc, Rakuten Group Inc., Reliance Industries Ltd., Seven and i Holdings Co., Ltd., SPAR International, Target Corp., Tesco Plc, Transform Holdco LLC, Walmart Inc., and Woolworths Group Ltd..

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Market Driver

Online grocery market is witnessing significant trends as urbanization increases and consumers seek convenience and time-saving benefits. Grocers are adapting to this shift by offering online payments and contactless delivery. Small-scale grocers and food-delivery platforms are entering the scene, bringing competition and variety. Service fees, discounts, and delivery options are key factors influencing customer loyalty. Brands are focusing on quality milk products, doorstep delivery, and easy, hassle-free experiences. E-commerce technology, including mobile applications, logistics, and secure payment gateways, is driving growth. Internet penetration and accessibility are essential for online shopping, with specialty products, international goods, and dietary options appealing to unique preferences. Faster deliveries, reliable deliveries, and cashback offers are essential for customer satisfaction and repeat purchases. Tech-savvy consumers demand efficient delivery logistics and user-friendly interfaces. Fresh produce, RTE food, snacks, and beverages are popular categories, with organic and locally sourced options gaining popularity. E-commerce platforms are enhancing the shopping experience with predictive analytics, demand forecasting, and route optimization. Busy lifestyles and health-conscious choices are driving the market for instant delivery, scheduled deliveries, and subscription services. 

Functional food and beverages, recognized for their health advantages, are increasingly popular among consumers globally. These products offer benefits such as enhanced immunity, improved mental strength, heart rate regulation, digestive health, hydration, and electrolyte replenishment. Consumers are prioritizing their health and investing in non-traditional fitness activities, leading in demand for functional food and beverages as a healthy nutrition source. However, not all of these products are readily available at traditional retail stores. As a result, online grocery markets have become a go-to destination for consumers seeking convenient access to a wide range of functional food and beverage options. 

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Market Challenges

Online grocery market is witnessing significant growth due to urbanization and the convenience of doorstep delivery. However, challenges persist in areas like online payments, contactless delivery, and brand awareness for small-scale grocers. Grocers and food-delivery platforms face hurdles in implementing secure payment gateways and ensuring quality of milk products and fresh produce. Discounts, delivery options, and service fees are crucial factors influencing customer choice. Digital platforms offer time-saving benefits, but challenges in logistics, user-friendly shopping experience, and reliable deliveries remain. E-commerce technology, including mobile applications and AI, is transforming the industry, with faster deliveries, cashback offers, and loyalty programs enhancing customer satisfaction. High-speed internet and last-mile delivery solutions are essential for efficient supply chain management. Traditional retailers must adapt to tech-savvy consumers’ preferences for convenience, freshness, and variety.The global online grocery market is experiencing steady expansion, yet challenges persist in altering the mindset of a significant consumer base. With food items being a major concern, end-users seek flawless and satisfying purchases. The preference for traditional grocery shopping remains strong due to the tangible experience it offers. Consumers express concerns over product quality, particularly freshness, which is crucial for perishable goods. Vendors face hurdles in creating a positive impact on consumers’ perceptions and establishing trust in the online grocery space.

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Segment Overview 

This online grocery market report extensively covers market segmentation by  

Product 1.1 Food products1.2 Non-food productsType 2.1 One time customers2.2 SubscribersGeography 3.1 APAC3.2 Europe3.3 North America3.4 South America3.5 Middle East and Africa

1.1 Food products-  The food product segment significantly contributes to the revenue generated from online grocery sales. Consumers prefer buying food products online due to several reasons. These include the option for customization and personalization, convenience, swift delivery, and return policies. Online retail channels offer quality and originality checks, making it easier for consumers to ensure they are getting authentic products. Leading packaged food producers, such as Nestle, Danone, PepsiCo, Mars, Coca-Cola, Kraft-Heinz, Abbott, and Mondelez, have a strong online presence, providing consumers with a wide range of brand options. The availability of smartphone apps from these manufacturers and retailers further enhances the shopping experience. The pandemic has accelerated the shift towards online grocery shopping, with retailers like Costco reporting over 440% increase in same-day delivery sales in Q2 2020. These factors are expected to drive growth in the online grocery food product segment.

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Research Analysis

Online grocery delivery has revolutionized the way we shop for household essentials and household products. With the widespread use of the internet and digital platforms, grocers now offer convenient time-saving benefits for urban consumers. Ordering items online allows for contactless payment options, ensuring a safe and hygienic shopping experience. The use of artificial intelligence (AI) and machine learning (ML) in supply chain management ensures a wide product selection and the freshness of items. Small-scale grocers have also joined the digital revolution, offering organic and locally sourced groceries for tech-savvy consumers. Delivery options range from contactless curbside pick-up to drone deliveries, making grocery shopping more accessible than ever before. Discounts and deals add to the appeal, making online grocery delivery a popular choice for busy individuals.

Market Research Overview

Online grocery shopping is a convenient and time-saving solution for urban consumers, allowing them to order essential items online and receive doorstep delivery. Grocers have embraced e-commerce technology, offering user-friendly digital platforms for ordering milk products, fresh produce, RTE food, snacks and beverages, and even international goods and dietary options. Contactless delivery ensures a hassle-free experience, with secure payment gateways and cashback offers, loyalty programs, and subscription models enhancing customer satisfaction and repeat purchases. Logistics and last-mile delivery solutions, such as delivery drones and automated vehicles, ensure faster and reliable deliveries. Small-scale grocers and food-delivery platforms have joined the fray, offering a wide range of specialty products and unique preferences. E-commerce platforms provide easy access to a variety of products, enabling price comparison, product reviews, and smartphone usage for on-the-go shopping. Efficient supply chain management, predictive analytics, and demand forecasting have become essential for grocers to meet the needs of tech-savvy consumers. Freshness and quality are maintained through local fulfillment centers and inventory management. The scheduled deliveries segment, subscription services, and hybrid marketplaces cater to busy lifestyles and health-conscious consumers seeking RTE choices, organic options, and plant-based alternatives. Artificial intelligence (AI) and machine learning (ML) are transforming the online grocery market, providing personalized recommendations and enhancing the overall shopping experience. Traditional retailers are adapting to the digital age, offering online transactions, instant delivery, and varied delivery options to remain competitive. The future of grocery retail lies in the seamless integration of e-commerce technology, user-friendly interfaces, and efficient delivery logistics.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

ProductFood ProductsNon-food ProductsTypeOne Time CustomersSubscribersGeographyAPACEuropeNorth AmericaSouth AmericaMiddle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio