Online grocery to be the next battleground for e-commerce growth in India – RedSeer

INDIA – India’s e-commerce scene has been a battle ground of sorts in the past one year, with more players than ever before entering the market and jostling for a share of the retail segment from seasoned players.

As the market reaches saturation and JioMart-the latest entrant in the scene- promising a massive potential to disrupt the space, market research firm RedSeer sees the delivery of groceries online as the the next battleground for growth.

“Grocery is the largest retail category. This makes it an important category for retailers and one that is going to drive future growth of online retail sales,” says Satish Meena, senior analyst at Forrester.

The Covid-19 induced lockdowns and social distancing led to a surge in online orders for groceries, driven by utility as 80 per cent of those who ordered online during lockdown did it for convenience as opposed to price and selection.

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According to a survey by LocalCircles, 52 per cent of online grocery shoppers found the e-commerce grocery apps useful during lockdown.

As many as 32 per cent of online grocery shoppers placed one or more orders every week during the lockdown while 38 per cent found fruits and vegetables delivered via e-commerce grocery apps to be of poor quality.

According to a recently released report by RedSeer, the market size of the online grocery delivery will grow eight times in the next five years in the country, expanding to over US$18 billion by 2024.

On his part, Meena notes that grocery will also be the category where most marketplaces’ investments will be made in the next five years.

Reliance and BigBasket are already showing plans to increase investments in the grocery delivery platforms in an effort to take advantage of the current uptick in demand for these services.

Reliance Jio’s new commerce platform JioMart and Whatsapp will be working closely to create growth opportunities for millions of Indian small merchants and kirana shops, Reliance Industries (RIL) Chairman Mukesh Ambani said recently.

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In India, there are more than 15 million monthly WhatsApp Business app users, and more than 400 million overall users.

Reliance aims to integrate JioMart in WhatsApp within the next six months to leverage on the opportunity created by these wide pool of potenial customers.

The integration has however met stiff opposition from other stakeholders who have raised concerns about the integration and its impact on the privacy of users.

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