The e-commerce industry has recently brought a tectonic shift in customer shopping behaviors. Some of the trends, including technological advances, competitive pressures, and changing consumer behaviors could boost the grocery business. Prominently, online grocery trends, including pre-ordering, have redefined the global landscape amidst the COVID-19 pandemic. A notable spike in demand for contactless shopping prompted investments in online shopping. Grocery categories, including frozen food, fresh meat, produce, and dairy witnessed increased traction globally.
Business Research Insights forecasts the market for global online grocery market size is expected to grow from USD 52000 million in 2021 and market is projected to touch USD 135340 million by 2028, at CAGR of 14.6%.
Leading companies have upped investments in user experience as they strive to propel brand quality and strength. Some factors, such as order history for reordering, saved preferences, and product selection, could accentuate consumers’ traction for online grocery. Some of the major companies to watch out for over the next few years are illustrated below:
1. Kroger
Kroger is a U.S. company headquartered in Cincinnati, Ohio and claims to be the country’s largest grocer, with almost 2,800 stores in 35 states. Kroger was established in 1883 when Barney Kroger apparently invested USD 372 to open a single grocery store in downtown Cincinnati. The company has cashed in on the growing trend for online grocery. For instance, in March 2021, Kroger asserted that it would double its online sales by the end of 2023.
2. Tesco
Founded in 1919, Tesco, the British multinational grocery, has been a leading multinational retailer serving customers with sustainable, affordable, and healthy food. Amidst soaring appetite for on-demand groceries, the U.K.-headquartered company has spurred investments in the e-commerce sector. For instance, in October 2021, Tesco teamed up with Gorillas to test a 10-minute delivery service from its supermarkets.
3. BigBasket
BigBasket is an Indian online grocery supermarket company founded in 2011. The company is headquartered in Bangalore and reportedly has presence in 40 cities across India with more than 20,000 products and over 1,000 brands in its catalog. In May 2021, Tata Digital acquired a 64% stake in BigBasket to boost its e-commerce portfolio. BigBasket claims to clock more than 15 million orders per month.
4. Coles Online
Owned by Coles Group, Coles Online was founded in 1999 and is headquartered in Melbourne. In March 2020, Coles announced the launch of an online priority service to serve vulnerable and elderly customers amidst the COVID-19 pandemic. The Australian company has fueled investments in online shopping to tap into markets. To illustrate, in June 2021, Coles contemplated investing USD 2.5 billion on its digital platform over the next two years. The company aims to boost the online shopping experience and enhance customer satisfaction.
5. Walmart
Walmart has been redefining the retail sector ever since it was established in 1962. The U.S. multinational retail company operates a chain of grocery stores, discount department stores, and hypermarkets. The company claims that 90% of the U.S. population lives within 10 miles of its stores. In January 2021, Walmart expressed contemplation to bolster the application of high-tech systems to ramp up pick & pack online grocery orders.
6. Carrefour
Carrefour, a French multinational company, was created in 1959 and operates a chain of groceries, hypermarkets, and convenience stores. The company aims to boost its e-commerce Gross Merchandise Value (GMV) three-fold by 2026. The French company has ramped up efforts on quick commerce (less than 15 minutes) and express delivery (less than 3 hours) to bolster its position in home delivery in major markets.
7. Amazon
Amazon is a U.S. company emphasizing e-commerce, digital streaming, artificial intelligence, and cloud computing. Jeff Bezos founded Amazon in 1994 in Washington as an online marketplace for books. The U.S.-based e-commerce company expects to cash in from Amazon Fresh groceries, Prime Now, and Go, among others globally. For instance, in 2020, the first Amazon Fresh was reported to have opened in the upscale Los Angeles neighborhood of Woodland Hills.
Online Grocery Faces Stiff Competition from Conventional Groceries
Digital grocery giants are grappling to expand their presence across tier 2 and 3 cities, which tend to have different industry dynamics. Needless to say, e-commerce groceries faced tough competition after the pandemic boom. While rural shoppers and baby boomers seek in-store shopping, millennial and urban shoppers could play a pivotal role in boosting the e-commerce sector. With a myriad of large grocers foraying into the e-commerce offering, emphasis on strategic agility and innovations is expected to be more pronounced over the next few years.