E-grocery

market in India

Confidential
India: E-grocery market summary
Market size & dynamics
Grocery is the largest category of the Indian
retail market at $410bn in 2020 (per
Euromonitor) with the lowest online
penetration at just 0.9%. JPM expects egrocery
to grow 28x to $96bn over the next decade with
9% online penetration. The primary drivers of
the growth will be increase in monthly buyers
as well as increase in monthly order
frequencies. We believe the majority of
customers’ grocery wallet spend is still with
kiranas, which could potentially shift to online
purchase gradually over time. This will lead to
increases in both number of online buyers as
well as online order frequencies. We don’t
believe AOV can increase much from the
current levels as a lot of the incremental growth
will come through expansion in tier 2-3 cities as
well as higher share of private labels, both of
which should have a downward bias on AOVs.
Backbone industry overview
As of 2020, there are around 130 Million
e-grocery addressable households in India.
More than 90% of the market is unorganized,
dominated by more than 13 million small
mom-and-pop stores. As per a report by
Kearney, 25% of the organized grocery market’s
growth over the next few years could come
from online shopping. Based on the category,
the market is fragmented into Fresh Produce,
Breakfast & Dairy, Snacks & Beverages, Meat &
Seafood, Staples & Cooking essentials. The
Staples and Cooking essential segment grabbed
the major market share of 39.8% and generated
$1,057.7mn in 2020. Based on the Payment
Method, the market is fragmented into Online,
Cash on Delivery, E-Wallets. The Cash on
Delivery segment captured 69.7% market
revenue in 2020. Based on the Purchase Type,
the market is segregated into One-Time
purchase and Subscription. The One-Time
Purchase segment grabbed lion’s share -
captured 64.2% market share to reach a market
valuation of USD 1,708 Mn in 2020.
Market playfield
Bigbasket and Grofers have been the leading
vertical etailers in the space built over the last 7-
9 years. Horizontal etail players like Amazon
and Flipkart have increasingly built presence in
the category over the last couple of years.
JioMart’s beta launch in May 2020 makes it a
somewhat late entrant. Among vertical egrocery
players, JioMart leads on MAU while Bigbasket
and Grofers lead on convenience. In terms of
SKUs, Bigbasket leads followed by JioMart and
Grofers. There is no minimum order value for
JioMart, Bigbasket, Grofers and Swiggy. All
players except Swiggy have private labels. The
egrocery firms have a subscription service as
well for high frequency products such as milk,
bread and fruits. Users have an option to select
the start date and frequency of deliveries. The
frequency could be daily, alternate days, weekly
and monthly. Bigbasket has BB Daily, Swiggy
has Supr Daily, while JioMart also recently
launched its subscription services. Subscription
services are a different delivery model to
regular egrocery models and have the potential
to be the highest frequency category that
increases user stickiness and expands customer
lifetime value. Horizontal players such as
Amazon and Flipkart sell beauty and personal
care products, but even egrocery firms offer
personal care products. Bigbasket has
expanded into selling beauty products, too.
Nykaa started off selling beauty products but
then entered into selling personal care products
as well. The firms are expanding their offerings
in order to grab a bigger share of the
customers' wallets. Confidential 2
India: E-grocery market data

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