E-grocery continues to grow at the same pace even after the pandemic

Chennai: E-grocery, which grew at a CAGR of 64 per cent during the pandemic, continues its pace of growth even after the return of normalcy. The lower user base offers more scope for penetration.

Among the various e-tailing segments, e-grocery had the highest growth rate at 64 per cent since FY19. COVID acted as a catalyst in boosting the adoption of e-grocery in major cities with stricter lockdown protocols. Eventually, as more consumers got accustomed to the convenience of having essentials delivered to their doorstep, e-grocery maintained its demand and growth both at the annual and quarterly levels.

However, of the total number of e-tailing users in India, only about 11 per cent or 25 million people were annual transacting users of e-grocery as of FY23. Players now have an opportunity to acquire new users as 40 per cent of the non-e-grocery users are not even aware of the online grocery options available in their area. E-grocery players have an opportunity to acquire new users by solving the key challenges associated with this cohort and also present an opportunity to convert those who are on the fence about shopping for groceries online.

Despite the rapid growth of quick commerce in metro and tier-1 cities, product selection and availability are challenges that platforms need to solve to improve consumer satisfaction. This deficiency in product depth is where quick commerce platforms have to be encouraged while seeking a wider adoption among new users. Various delivery constraints on the last mile also add to the reluctance of offline shoppers to convert to e-grocery.

For many, buying from their local Kirana stores is an ingrained habit they don’t see the need to change. Moreover, these offline buyers prefer the touch and feel of the products being purchased to feel assured about the quality—an experience that’s not available when shopping online.