Economy

‘Online grocery market to cross $3-b GMV in 2020’

Sangeetha Chengappa Bengaluru | Updated on September 25, 2020 Published on September 25, 2020

Online grocery sales, a $1.9-billion market in 2019, is positioned to be the next bastion of growth for e-commerce firms. It is expected to grow to $18 billion-plus by 2024, reveals a report by RedSeer and BigBasket entitled ‘Online Grocery: What Brands Need to Know’.

Driven by the significant consumer shift to online shopping during Covid, eGrocery has been on a surge with a 1.7X increase in gross merchandise value (GMV) in June versus January, and is expected to grow steadily for the rest of the year to reach $3 billion-plus in 2020.

Fresh vegetables and fruits saw 144 per cent growth during Covid and FMCG products grew 150 per cent. While some of this growth will normalise as the impact of the pandemic subsides, a significant chunk of new users are expected to continue to shop online and drive growth.

Comfort foods

The demand for comfort foods such as noodles and cookies, immunity boosters such as lemon, and hygiene products such as sanitisers has picked up like never before, while essentials remained strong. Snacks and branded foods, which grew by 5 per cent quarterly pre-Covid, jumped to 75 per cent growth in Q2 2020; biscuits and cookies was the largest sub-category and grew the most last quarter.

Beverages, which grew by 2 per cent quarterly pre-Covid, jumped to 50 per cent in Q2 2020 due to Covid. While tea was the largest sub-category, fruit juices and drinks grew the most last quarter.

Personal care grew by 5 per cent quarterly pre-Covid, but growth jumped to 24 per cent in Q2 of 2020. Bath, face and hand wash was the largest sub-category and grew the most last quarter; however, hair care and skin care grew the least. Expectedly, handwash was in demand as people stocked them up to be protected from the virus.

Seshu Kumar Tirumala, National Head, Buying and Merchandising – BigBasket, is expecting bumper sales with 150 per cent growth during the upcoming festival season sales.

BigBasket doubled sales from February to July, grew its customer base by 80 per cent, and saw average order value spike from ₹1,300 in February to ₹1,500. “Ayurvedic products and health supplements saw significant traction in April and May. Stationery and hobby items saw 350 per cent growth; baking mixes and dessert mixes witnessed 200 per cent growth; cheese and garlic bread grew by 370 per cent; home and gardening tools grew by 200 per cent; and frozen non-veg snacks grew by 310 per cent,” Tirumala told BusinessLine.

Branded products

Consumers have shifted from unbranded loose groceries, dry fruits, chocolates, etc to branded and packaged products during the lockdown and are willing to pay more for a safe and trusted local or national brand, said Samarth Agrawal, co-founder and CEO, MaxWholesale, a B2B e-commerce platform for Kirana stores.

Saurabh Kumar, founder, Grofers, said that the platform has stabilised at 30 per cent higher demand than pre-Covid levels, along with a 40 per cent increase in basket size. “We have seen a 54 per cent increase in orders from smaller cities like Indore, Agra, Panipat etc; have acquired 18 lakh new customers and over 70 per cent of those who shopped on Grofers in the first month of the pandemic are still shopping on our platform.”

Grofers has seen 64 per cent first-time online grocery shoppers and 20 per cent first-time online shoppers. “Consumers are buying our private labels as they are quality products at affordable prices. They are also stocking up for staples, detergents and snacks. Health and Ayurvedic products, Ready-to-Eat and Ready-to-Cook meals and snacks have also shown a higher penetration during the lockdown” added Kumar.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on September 25, 2020
This article is closed for comments.
Please Email the Editor