Indian e-grocery market to witness expansion in Tier 2+ cities: Report


The Indian e-grocery market is set to witness an expansion in tier 2 cities and beyond regions, a report by Redseer has stated.

The expansion of eGrocery is expected to continue in Tier 2+ markets, driven by dominant players, the report said.

Further adding, it said that in CY2023, the market is expected to witness growth in Tier 2 regions, with horizontal players leading the way, while the adoption of quick commerce is expected to remain steady.

The Indian eGrocery market which has been primarily dominated by slotted delivery is offering a convenient way for people to purchase and receive groceries online. 

However, the significant growth in the market between 2019 and 2022 can be attributed to the adoption of quick commerce in cities. 

In the report titled ‘Decoding the Exceptional Trend of eGrocery in Developing Markets’ it analysed the growth of e-grocery in three countries namely India, Indonesia and MENA (acronym refers to a grouping of countries situated in and around the Middle East and North Africa)

As per the report, e-Grocery, which remained a minuscule fraction of the total grocery sales across regions until 2019, experienced a surge in demand due to the pandemic lockdowns. 

As a result, while the online penetration in e-Grocery was steadily increasing in the Indian market, Indonesia and MENA witnessed skyrocketing trends in adoption. 

Fast forward two years and the trends remained upward, with MENA and Indonesian regions experiencing over 100 percent Compound annual growth rate (CAGR) from 2019 to 2022, while India witnessed a 66 percent CAGR.

The report further stated that the COVID-19 pandemic was a strong catalyst for the exponential growth of online groceries across the developing world. 

Initially driven by a response to the lockdowns and supply chain disruptions, the market has since evolved to cater to consumer habits, convenience and local drivers. As a result, various business models have emerged successfully to occupy market segments and serve consumer needs. The trend of e-grocery market will likely continue even after the pandemic subsides as consumers have become accustomed to the convenience and safety of online grocery shopping.

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