The global online grocery market size was valued at USD 189.81 billion in 2019 and is projected to register a CAGR of 24.8% from 2020 to 2027. Rising disposable income and people’s increasing inclination toward comfort are anticipated to drive the market over the forecast period. Online grocery shopping is also gaining popularity among customers owing to the growing preference for a hassle-free shopping experience online. Furthermore, the outbreak of COVID-19 has led to an increase in the number of customers buying grocery online in order to avoid going to department stores and limit their social contacts. Although the impact of coronavirus has caused an upsurge in online grocery shopping across the world only recently, it is expected to change the consumers’ buying behavior and positively impact the market over the long term.
The shift toward online grocery shopping from traditional shopping methods is fueling market growth. According to the United Nations Conference on Trade and Development, global e-commerce sales reached USD 29 trillion in 2017. Furthermore, the total number of online shoppers worldwide reached 1.34 billion as compared to 1.20 billion in 2016. This number is bound to rise owing to technological developments that have led to the adoption of online platforms by various retailers as well as rising disposable income among people in developing economies.
Rising number of smartphone users is expected to propel the market growth over the forecast period. Smartphones are widely used for online shopping owing to their ease of operation as they allow users to buy products over mobile applications. Major smartphone manufacturers are focusing on increasing their smartphone sales and are investing heavily in R&D to manufacture technologically advanced smartphones.
Internet of Things (IoT) helps retailers enhance customer experience and manage inventory efficiently. Increasing adoption of IoT by various retailers worldwide is anticipated catapult the market growth. For instance, in 2018, Walmart partnered with Microsoft Corporation to accelerate its digital transformation and provide a better shopping experience to its customers. According to the five-year deal between the two companies, Walmart will move a significant portion of samsclub.com and walmart.com to Azure to enhance customer’s online experience.
Lack of physical evidence of the products while shopping online is anticipated to hamper the online grocery market growth. Lack of trust regarding the freshness of products is also a major reason that restricts people from shifting to online grocery shopping. However, companies such as Amazon, Alibaba, and Target are focusing on overcoming this challenge by providing fast delivery and bigger discounts to attract customers.
On the basis of product type, the market is segregated into fresh produce, breakfast and dairy, snacks and beverages, meat and seafood, staples and cooking essentials, and others. The staples and cooking essentials segment held a notable share of over 25.0% in 2019. This share is attributed to the repetitive shopping of staples that include food grains, flours, and essentials like oil that are fundamental requirements of many households in the Asia Pacific. Furthermore, changing lifestyles and rising disposable income are paving the way for growth over the next seven years.
The breakfast and dairy segment is projected to expand at a CAGR around 24% from 2020 to 2027 owing to the growing demand for dairy products such as milk, yogurt, and curd. These products are a daily necessity for people and have a short lifespan as compared to other products. Furthermore, these products cannot be stored for a longer period of time and need to be consumed within a specific duration.
In 2019, North America held a substantial share in the overall market, contributing almost 15% in terms of revenue. This high share is attributed to the presence of several prominent players in the region and increasing e-commerce sales in U.S. According to the U.S. Census Bureau, e-commerce sales for retailers in the U.S. was valued at USD 461 billion in 2017 as compared to USD 397.3 billion in 2016.
Asia Pacific is projected to be the fastest-growing region with a CAGR of over 27.0% during the forecast period. This upsurge is due to initiatives taken by the government of India and China to promote digitalization and e-commerce in their respective countries. In 2015, the Indian government launched a Digital India campaign to empower the nation digitally. According to the India Brand Equity Foundation (IBEF), the number of internet users in the country is expected to increase from 636.7 million in 2019 to around 829 million by 2021.
The market is highly fragmented in nature and is characterized by a high degree of competition between major players. Some of the key players operating in the market are Walmart; JD.com, Inc.; Alibaba.com; Amazon.com, Inc.; and Rakuten. These companies are focusing on strengthening their market presence by adopting inorganic strategies such as acquisitions, mergers, partnerships, and collaborations. For instance, in 2018, Walmart acquired 77% stake in Flipkart for USD 16 billion to expand its business in India.
Furthermore, Walmart announced its partnership with Rakuten in 2018, to launch its first e-commerce store in Japan in order to revamp its business in Asia. Additionally, in order to gain a competitive advantage in the market, companies are focusing on providing additional features to their solutions to leverage their product offerings and cater to the end-user requirements.
Attribute |
Details |
Base year for estimation |
2019 |
Actual estimates/Historical data |
2016 - 2018 |
Forecast period |
2020 - 2027 |
Market representation |
Revenue in USD Billion and CAGR from 2020 to 2027 |
Regional scope |
North America, Europe, Asia Pacific, Latin America, Middle East & Africa |
Country scope |
U.S., Canada, U.K., Germany, France, China, India, Japan |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
15% free customization scope (equivalent to 5 analyst working days) |
If you need specific information that is not currently within the scope of the report, we will provide it to you as a part of the customization. |
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global online grocery market report based on product type and region:
Product Type Outlook (Revenue, USD Billion, 2016 - 2027)
Fresh Produce
Breakfast & Dairy
Snacks & Beverages
Meat & Seafood
Staples & Cooking Essentials
Others
Regional Outlook (Revenue, USD Billion, 2016 - 2027)
North America
The U.S.
Canada
Europe
The U.K.
Germany
France
Asia Pacific
China
India
Japan
Latin America
Middle East & Africa
b. The global online grocery market is expected to grow at a compound annual growth rate of 24.8% from 2020 to 2027 to reach USD 1.1 trillion by 2027.
b. Staples and cooking essentials segment dominated the online grocery market with a share of 26.27% in 2019. This is attributable to repetitive shopping of staples that include food grains, flours, and essentials like oil that are fundamental requirements of many households in the Asia Pacific.
b. Some key players operating in the online grocery market include Walmart; JD.com, Inc.; Alibaba.com; Amazon.com, Inc.; and Rakuten.
b. Key factors that are driving the online grocery market growth include the outbreak of COVID-19 which has led to an increase in the number of customers buying grocery online, and rising disposable income & people’s increasing inclination toward shopping from the comfort of their home.
b. The global online grocery market size was estimated at USD 189.81 billion in 2019 and is expected to reach USD 1.1 trillion by 2027.
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Due to the Covid19 pandemic consumers are preferring purchasing groceries online and stocking up for emergencies. Online grocery delivery platforms are trying to ensure a smooth and fast shopping experience for their customers on the websites and apps. Will they be able to effectively cater to the demand amidst the restrictions and tackle competition as their brick and mortar counterparts venture into the online market? We are continuously monitoring the market dynamics and trying to assess the impact of Covid19 on the demand. The report will account for Covid-19 as a key market contributor.