Online Grocery Delivery Services Market size is set to grow by USD 1.12 trillion from 2024-2028, Increased popularity and adoption of E-commerce platform boost the market, Technavio

NEW YORK, Aug. 13, 2024 /PRNewswire/ -- The global online grocery delivery services market size is estimated to grow by USD 1.12 trillion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 25.2% 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 foods and beverages. However, end-user perception of online grocery shopping poses a challenge. Key market players include Albertsons Companies Inc., Alibaba Group Holding Ltd., Amazon.com Inc., Blink Commerce Pvt. Ltd., Brandless, Carrefour SA, Coles Group Ltd., Costco Wholesale Corp., Flipkart Internet Pvt. Ltd., HOFER KG, Innovative Retail Concepts Pvt. Ltd., Maplebear Inc., METRO Cash and Carry India Pvt. Ltd., Ocado Group Plc, Rakuten Group Inc., SPAR International, Target Corp., Tesco Plc, The Stop and Shop Supermarket LLC, and Walmart Inc..

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Market Driver

The global online grocery delivery services market is expected to grow significantly due to the increasing demand for functional foods and beverages. Consumers worldwide are prioritizing their health and opting for products that offer benefits such as enhanced immune system, improved mental strength, heart rate, digestive health, hydration, and electrolyte replenishment. As these functional foods and beverages are not easily available in physical stores, consumers turn to online shopping. Vendors of these products effectively label and formulate them to attract customers. Online grocers and delivery services are capitalizing on this trend by offering a wide range of functional foods and beverages to capture a larger market share in the online grocery sector. 

Online grocery delivery services have seen significant growth in recent years, driven by logistics advancements and the increasing number of warehouses. Traditional retailers face stiff competition from B2C enterprises, with consumers, especially price-conscious and those with discretionary spending, preferring the convenience of full basket-offerings and meal kits. Quick commerce and convenience stores, like Meituan, are also gaining popularity. Key market indicators, such as user metrics from surveys, show a strong preference for home delivery via apps and websites. In urban areas, where internet connection speed is high, the trend is particularly pronounced. Forecasting techniques, like the S-curve function and exponential trend smoothing, indicate continued growth. Macroeconomic factors, such as GDP per capita, internet users, urban population, and per capita expenses on household & grocery items, are also key drivers. The coronavirus pandemic has further accelerated digitization in the sector. Investments in advanced solutions, such as mobile applications and user-friendly websites, will be crucial for profit margins in food and groceries. Affluent consumers, particularly in urban areas, are expected to continue driving demand for online grocery delivery services. Fruits & vegetables and dairy products are popular categories. 

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Market Challenges

• The global online grocery delivery services market is witnessing steady growth, yet faces challenges in altering the mindset of a significant consumer base. End-users, particularly those with concerns over product quality, prefer traditional grocery shopping for the tactile experience. Perishable items and fresh produce are major concerns, with consumers seeking assurance of product freshness. Moreover, social interaction during grocery shopping and the lack of personal product experience are deterrents for some. Additionally, high delivery costs, inconsistent product quality, and limited availability of promotions are further hindrances. Unorganized local players offering same-day delivery and exchange facilities pose a threat, making it essential for online grocery delivery services to address these concerns to gain market traction. Despite these challenges, the millennial and Gen Z population are increasingly embracing online grocery services due to their busy lifestyles. To overcome the obstacles, vendors must focus on enhancing product quality, providing competitive pricing, and offering personalized customer experiences. By addressing these issues, online grocery delivery services can successfully penetrate the market and capture a larger share.
• Online grocery delivery services have gained significant traction in today's fast-paced world, with the rise of online shopping and rapid digitization. However, the market faces challenges in catering to staple foods and cooking essentials category due to traffic jams and extended working hours. Online retailers are addressing these issues by improving door delivery, easy access, user-friendly features, and payment options through shopping applications and improved websites. Faster delivery times, improved logistics, and convenient delivery options are also key focus areas. Revenue share from mobile apps and multiple channels is expanding the customer base, making grocery shopping a convenient, time-saving option for individual consumers. Analysts predict growth in the market for fresh food, meat and seafood, and staple meals, as consumers prioritize quality and freshness over physical stores during social distancing.

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Segment Overview 

This online grocery delivery services market report extensively covers market segmentation by 

1. End-user 
• 1.1 Individuals
• 1.2 Others
2. Product 
• 2.1 Non food products
• 2.2 Food products
3. Geography 
• 3.1 APAC
• 3.2 Europe
• 3.3 North America
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Individuals- The individuals segment holds the largest market share in the global online grocery services market and is expected to continue its dominance throughout the forecast period. This growth can be attributed to the increasing preference for convenient shopping platforms among millennials and baby boomers, who make up a significant portion of the population. The rise in the number of dual-income households, particularly due to the increasing working women population, has led to hectic lifestyles, making home delivery a desirable option. Online grocery delivery services offer several benefits to individuals, including time savings as there is no waiting time at billing counters, integration of meal planners, increased savings through sticking to shopping lists, substantial discounts and deals, detailed product descriptions, and the convenience of saving preferences and opting for subscription plans for timely delivery. Additionally, the absence of parking and transportation hassles, availability of good-quality products, and reduced operation costs due to fewer returns and complaints further drive the demand for online grocery delivery services among individuals.

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Research Analysis

The online grocery delivery market is experiencing exponential growth, driven by logistics and warehousing advancements, digitization, and the increasing use of smart mobiles and the internet. Customers, especially price-conscious and those with discretionary spending, are embracing this convenience. Traditional grocery retailers are responding with full basket-offerings and meal kit options. Macroeconomic factors such as per capita expenses, urbanization, and investments in advanced solutions are fueling expansion. Current trends include the use of mobile applications, economic areas, and anticipated future changes in consumer behavior. International producers and suppliers are also entering the market, making for a dynamic and competitive landscape. The current situation presents opportunities for innovation and growth, with anticipated future changes promising even more exciting developments.

Market Research Overview

The online grocery delivery services market is experiencing rapid digitization and urbanization, driven by the increasing adoption of smartphones and internet usage. The macroeconomic environment plays a significant role in shaping the market, with factors such as GDP per capita, urban population, and internet connection speed influencing consumer behavior. Price-conscious consumers are increasingly opting for full basket-offerings, while affluent consumers seek convenience and quick commerce offerings like meal kits and fresh produce. Traditional grocery retailers are responding to this trend by expanding their online presence and improving user-friendly websites and shopping applications. The industry's turmoil includes traffic jams, extended working hours, and the coronavirus pandemic, leading to a surge in home delivery demand. Key market indicators include user metrics, survey results, and forecasting techniques such as the S-curve function and exponential trend smoothing. Developing technology, rising investment requirements, and new laws are also shaping the market. Current trends include the expansion strategies of significant industry players, international producers, and suppliers. Anticipated future changes include the adoption of advanced solutions, improved logistics, and faster delivery times. The market for food and groceries includes staple foods, cooking essentials, fruits & vegetables, dairy products, and frozen foods. Online grocery retailers are focusing on easy access, user-friendly features, payment options, and door delivery to meet consumer demand. The market for online grocery delivery services is expected to continue its exponential trend, with revenue share coming from a wide range of economic areas. The convenience and ease of shopping for household & grocery items from the comfort of one's home make it an attractive option for consumers.

Table of Contents:

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

• End-user
• Individuals
• Others
• Product
• Non Food Products
• Food Products
• Geography
• APAC
• Europe
• North America
• Middle East And Africa
• South America

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.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: [email protected]
Website: www.technavio.com/

SOURCE Technavio

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