The Online Grocery Market in India [Report]
We have earlier profiled egrocery stores like ZopNow, Aaramshop, MyGrahak.com, Shopveg.in and Farm2Kitchen, but this time we are going to do a round up on the egrocery market in India, its trends and challenges.
You will be surprised to know that India is the sixth largest grocery market in the world. So much for a country where 41.6 per cent people are below the poverty line. The food and grocery segment constitutes about 70 per cent of the $470 billion retail market in India. While only 5-8 per cent of this market is organized, the rest are actually disorganised mom and pop shops run by family members. But the trend is fast changing. More and more food and grocery stores are falling in line and growing at a rate of 18.4 per cent YoY.
And now with the growth in nuclear urban couples, internet friendly shoppers, rising disposable incomes and rising ecommerce reliability, times are changing. Grocery e-tailing has caught on as one of the new verticals and spawned many a startups, including a few mentioned above. According to a study conducted by D’Essence Consulting, 85 per cent of those who shop for groceries online are in the age bracket of 22-45. While studies show more men shop online, women eshoppers are also growing rapidly.
So what is it that really influences people to come online and buy groceries? Has the touch-and-feel factor we always preferred, diminished? What is it really? When questioned some said it was because of convenience of shopping within the premises of a comfortable zone and to avoid crowds, hankering over prices, rising conveyance costs, and ease of delivery. Some others felt that it was also due to the fact that ecommerce has opened up, people are more informed about possible transaction risks and the modes of payment are numerous. The study portrays other factors that influence people to shop online are the advantages of discovering products that are not so easy to find on the retail shelf, valuable discounts/offers, and the benefit to stick within the pre-envisioned budget.
But is everything really perfect in wonderland? We doubt so. While egrocery tailing may seem to be a no fringe business model, the reality is that these online companies are finding it pretty difficult to scale up the business. On one side where they face constant hiccups in maintaining a solid supply chain management, building up first and repetitive customer base is a gigantic challenge. This is because profit lines are marginal and there are numerous players offering similar services. And the competition is not limited within new-generation e-grocers alone! The good old kirana stores also give them a run for their money as people often buy groceries and other utility items from local shops while enjoying a personal rapport with the owners, built over a long period of time.
However, times are changing and ecommerce is seeing a new dawn every day. What subsequently happens only time will tell. For now we are keeping our fingers crossed.
Recommended Read: A feature that every India based online grocery site needs to implement