According to IBIS WORLD the Online Grocery industry comprises of Meat, fish, poultry and other deli items, fruits and vegetables, dairy products, beverages, frozen foods, drugs and healthcare items, other non-food items and other foods. Online grocery stores allow individuals and businesses to purchase grocery products online via a mobile app or a website. After the order is placed the companies then deliver the orders to the consumer’s doorstep.
From the emerging trend of online grocery in Dubai to New York, `Peapod online grocer (US), LLC is one of the key points in history where the Concept of online grocery shopping was formally introduced. `Peapod is one of the first online grocery stores founded around 30 years ago in 1989 by Thomas Parkinson (Co-founder, CTO) & Andrew Parkinson(Co-founder) at Chicago, Illinois, US. Till this day `Peapod online grocer is up and running.
Online grocery market accounts for 1.5% of the total global retail market of food and grocery, which is valued to be around $12.24 trillion by 2020. According to IBIS WORLD, the overall grocery market of US in 2018 was valued $632 billion, while online grocery market in the US has grown from $12 billion in 2016 to $26 billion in 2018. These analytics shows that the online grocery market and its shopping trends have been steadily growing in the US.
In the US many companies have invested in the online grocery market but Amazon.com Inc. is one of the big names holding the largest market share in the overall e-commerce & e-groceries. Big names investing in this industry will mean hopeful competitors and well aware customers, hence triggering steady but exponential growth in the online grocery industry. Many peoples would prefer to buy grocery products online including fruits, vegetables, chicken, and even meat because to avoid moving to meat shop, the other reason is also to save time.
Among major e-commerce countries, China has the largest e-commerce and online grocery market in the world valued at $366.1 billion and $23.9 billion respectively for 2016, with an annual growth rate of 52.9%. In terms of the online grocery stores, JD.com & Alibaba are the top-notch retailers in China.
Top Countries with online grocery Market from 2012 to 2016.
|Country||2012||2013||2014||2015||2016||CAGR* (%) 2012-2016||Market share (%)|
|2. United Kingdom||6,123.7||6,722.5||7,366.8||8,095.3||8,929.2||9.9||12.0|
|6. South Korea||3,426.6||3,720.8||4,034.0||4,846.9||5,707.2||13.6||7.7|
|Source: Euromonitor, 2017|
Since China is the largest country for online grocery Market, let us now analyze its sales in terms of food products in order to understand which of food products are influencing the online grocery market.
|Rice, pasta and noodles||159.3||477.7||1,319.0||2,161.0||3,130.7|
|Sweet biscuits, snack bars, and fruit snacks||137.8||307.8||434.8||556.7||680.8|
|Processed meat and seafood||–||67.9||133.3||195.6||260.1|
|Processed fruit and vegetables||4.8||10.6||25.6||42.5||53.9|
|Ice cream and frozen desserts||0.0||1.4||7.5||12.6||14.1|
|Sauces, dressings and condiments||–||–||1.3||1.4||6.1|
|Source: Euromonitor, 2017|
In terms of attracting customers the most integral part for an online grocery store is to deliver reliable products on time to its consumers. Following are some of the common delivery methods:
- Store-based partnership
- Locker services
- Drone delivery
- Home delivery
Online grocery stores in Dubai and worldwide face a challenge from conventional physical retailers. Rivalry exists based on the price of the product, delivery time & product versatility. Customers may frequently choose to visit a physical local market so as to physically feel the product, or to purchase a perishable food item that may not be offered through online dealers. Furthermore, customary food merchants frequently introduce new promos and discount deals whereas online grocery items are expected to be 15% – 25% more expensive than their normal price at any local store.
The online grocery industry has been and is struggling because its growth is directly correlated to advancement in technology and modernity of lifestyle. As we step forward into the future we will see drastic growth in the online grocery industry, eventually, transforming it as the new normal in terms of grocery shopping.