Feb 18, 2021
According to a RedSeer analysis, India’s online grocery market, which contributed 0.3 per cent to the $603 billion food and beverages market in India, has grown 73 per cent in 2020 from the preceding year. The gross merchandise value (GMV) of the e-grocery market increased from $1.9 billion in 2019 to $3.3 billion in 2020, taking its penetration in the overall market to 0.6 percent on the back of Covid tailwinds primarily.
The online grocery market is currently led by BigBasket, Grofers, Amazon Pantry, Flipkart Supermart, JioMart, Dunzo, and more. The fruits, vegetables, and staples category saw the strongest shift from offline to online in 2020 with its GMV share in the e-grocery segment increasing from 39 percent to 47 percent. This was led by customers prioritizing buying essentials online followed by a shift from dining out to home-cooked meals.Importantly, BigBasket is currently in the advanced stages of discussion for selling a 68 percent stake in the company to Tata Group for around $1.2-1.3 billion. According to sources familiar with the matter, the stake sale to Tata would value BigBasket at approximately $1.8-1.9 billion. The deal may take 3-4 weeks to get completed post which BigBasket Co-founder Hari Menon will stay on board. The deal would provide an exit to BigBasket’s investors Abraham Group and Alibaba.
For now, the online grocery market is likely to grow to $5.3 billion in size in 2021 and up to $26 billion by 2025 driven by digital adoption in markets beyond urban geography. According to RedSeer, multiple large winners addressing varying customer segments such as convenience buying, value-buying, etc., and use-cases such as stock-up, top-up, and on-demand.