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From Brick-And-Mortar to Click-And-Order: The transformation of the grocery shopping experience in the digital age and the emergence of the global online grocery market have led the market to grow at a 25.14% CAGR by 2023–28.– Actual Market Research
Apr, 30
2023

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From Brick-And-Mortar to Click-And-Order: The transformation of the grocery shopping experience in the digital age and the emergence of the global online grocery market have led the market to grow at a 25.14% CAGR by 2023–28.– Actual Market Research

 

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The global online grocery market has witnessed significant growth in recent years, driven by the increasing adoption of e-commerce platforms and the growing demand for convenience and efficiency in shopping. The COVID-19 pandemic further accelerated the growth of this market as consumers turned to online channels to avoid physical stores and reduce the risk of infection. With the rising penetration of smartphones and the internet, coupled with the growing popularity of online payment methods, online grocery shopping has become an attractive option for busy consumers who seek to save time and simplify their shopping experience. Additionally, the increasing availability of a wide range of products, including fresh produce and perishable items, has helped fuel the growth of the online grocery market as more consumers trust online retailers to deliver high-quality products in a timely and reliable manner. As a result, the online grocery market is poised for continued growth in the years to come, presenting numerous opportunities for retailers, manufacturers, and suppliers to expand their reach and tap into new markets. Online groceries provide numerous benefits to consumers, including the ability to shop from anywhere at any time. Customers can easily browse through various products and compare prices, making it easier for them to find the best deals. Online grocery shopping also enables consumers to avoid the hassles of physical shopping, such as navigating crowded aisles, finding parking, and carrying heavy bags. Additionally, online grocery retailers often offer a range of delivery options, from same-day delivery to scheduled delivery times, allowing consumers to receive their groceries at a time that suits them best.

According to the research report "Global Online Groceries Market Research Report, 2028," published by Actual Market Research, the market is anticipated to cross USD 1450 billion by 2028, increasing from USD 397.06 billion in 2022. The market is expected to grow at a 25.14% CAGR by 2028. The online grocery market is experiencing rapid growth due to several factors that have made it an attractive option for consumers. One of the primary drivers of this growth is convenience. Online grocery shopping provides customers with the ability to shop from anywhere, at any time, without the need to physically visit a store. This flexibility enables customers to save time and effort by easily browsing through a wide range of products and comparing prices without the need to navigate crowded aisles or find parking. Further, the pandemic has forced many consumers to adopt new shopping behaviours, including the increased use of online platforms to purchase groceries. As people seek out safer shopping options and avoid physical stores to reduce the risk of viral infection, online grocery shopping has emerged as a popular alternative. This trend has been particularly prevalent in regions with strict lockdowns and social distancing measures, where consumers are encouraged to stay at home as much as possible. In addition to that, online grocery retailers are increasingly leveraging advanced technologies, such as artificial intelligence (AI) and robotics, to improve the efficiency of their operations and provide better customer service. These technologies enable retailers to streamline their supply chain and delivery processes, resulting in faster and more accurate order processing, improved product quality, and an enhanced customer experience.

The global online grocery market is segmented based on regions into North America, Europe, Asia Pacific, South America, and the Middle East and Africa. Among them, Asia-Pacific will dominate the market in 2022. Asia Pacific is a rapidly growing market for online groceries, with China and India being the largest contributors. The market in Asia Pacific is primarily driven by increasing internet penetration, growing urbanisation, and rising disposable incomes. The adoption of online grocery shopping in Asia Pacific is also being driven by changing consumer behaviour as consumers increasingly seek out convenient shopping options. In China, the online grocery market is benefiting from the adoption of advanced technologies, such as artificial intelligence and robotics, which are improving the efficiency of operations and delivery services. The online grocery market in Asia-Pacific is characterised by the adoption of advanced technologies such as artificial intelligence, machine learning, and robotics, which are improving the efficiency of operations and delivery services. For example, in China, companies such as Alibaba and JD.com are using artificial intelligence and robotics to improve their delivery capabilities and provide customers with faster and more efficient delivery services. Also, the region has a high penetration of mobile devices, and many consumers in the region prefer to shop online using their smartphones. As a result, many online grocery retailers in the region have adopted a mobile-first approach, providing customers with mobile apps that are easy to use and optimised for mobile devices.

Europe is another important market for online groceries, with the United Kingdom being the largest market in the region. The online grocery market in the UK is growing rapidly, driven by increasing adoption of online shopping platforms and the presence of major players such as Tesco and Sainsbury's. Europe has a well-established brick-and-mortar retail industry, with many large supermarket chains operating across the continent. As a result, many online grocery retailers in Europe have developed partnerships with these retailers, allowing them to offer customers a wide range of products and efficient delivery services. European consumers are increasingly conscious of the impact of their purchases on the environment. Many online grocery retailers in Europe have responded to this trend by emphasising sustainability in their business practises. For example, some retailers offer environmentally friendly packaging, while others prioritise sourcing products from local suppliers. However, North American consumers prioritise convenience when it comes to shopping for groceries. Many online grocery retailers in North America offer same-day or next-day delivery as well as click-and-collect options, which allow customers to pick up their orders at designated locations. Many North American consumers prioritise health and wellness when it comes to their food choices. Online grocery retailers in North America have responded to this trend by offering a wide range of healthy and organic products, as well as meal kit services that provide customers with easy-to-prepare healthy meals. Also, North America is home to many tech-savvy consumers, and many online grocery retailers in the region have responded to this trend by emphasising technology in their business practises. For example, some retailers offer mobile apps that make it easy for customers to place orders and track their deliveries.

The online grocery market in South America is growing rapidly, with many retailers expanding their offerings and services to meet the demands of consumers. This growth is being driven by increased internet penetration and smartphone usage, as well as changing consumer behaviour. South American consumers have a strong preference for locally sourced products, and many online grocery retailers in the region have responded to this demand by partnering with local farmers and suppliers. This allows them to offer a wide range of fresh and high-quality products to customers. However, the market in Latin America faces several challenges, including poor internet connectivity and infrastructure as well as a preference for traditional brick-and-mortar stores. On the other hand, the online grocery market in the Middle East and Africa (MEA) is still developing. The majority of the population in the MEA region is Muslim, and as such, there is a strong preference for halal products. Many online grocery retailers in the region have responded to this demand by offering a wide range of Halal-certified products. The online payments landscape in the MEA region is evolving rapidly, with many consumers preferring to use mobile payment solutions. Many online grocery retailers in the region have responded to this trend by offering a wide range of payment options, including mobile payment solutions.

The global online grocery market can be segmented based on product types, including staples and cooking essentials, snacks and beverages, breakfast and dairy, fresh produce, and meat and seafood. The Staples and Cooking Essentials segment includes products that are essential in day-to-day cooking, such as rice, pasta, spices, oils, and other pantry staples. The staples and cooking essentials segment accounts for a higher market share of the global online grocery market. The increasing demand for these products, coupled with the convenience of online shopping, is driving the growth of this segment. Additionally, the ease of ordering and the availability of a wide range of products are boosting the growth of this segment. Fresh produce is expected to grow due to the increasing demand for healthy and organic food options as well as the convenience of being able to order fresh produce online and have it delivered to the doorstep. Many online grocery stores have also started offering subscription services for fresh produce, which has further boosted its demand. Similarly, meat and seafood are expected to grow due to the increasing demand for high-quality and fresh meat and seafood products, as well as the convenience of being able to order them online. Many online grocery stores have also started offering services such as custom butchering and specialty cuts, which has further boosted their demand. Snacks, beverages, and breakfast and dairy are also expected to continue to grow in demand as they are considered essential items in households and have a consistent demand throughout the year. However, the growth rate may not be as significant as in fresh produce and meat and seafood.

The global online grocery market is segmented into two delivery types: home delivery and click-and-collect. Home delivery refers to the delivery of groceries directly to the customer's doorstep, while click-and-collect refers to the option of ordering groceries online and picking them up at a designated location, such as a store or a pick-up point. Currently, home delivery is the leading delivery type in the online grocery market, accounting for a significant share of the overall market. This is due to the convenience of having groceries delivered directly to one's doorstep, which eliminates the need to physically go to a store and saves time and effort. However, click-and-collect is also growing in popularity, particularly in regions such as Europe and North America. This is due to the convenience of being able to order groceries online and pick them up at a designated location, which eliminates the need to wait for a delivery or pay for shipping fees. Click-and-collect also allows customers to have more control over their order and check the quality and freshness of the products before taking them home. Additionally, some retailers offer special discounts or incentives for using the click-and-collect option.

Online grocery stores are offering subscription models to customers for regular deliveries of essential items, such as staples and fresh produce. This provides a convenient and cost-effective way for customers to regularly purchase necessary items. They are also expanding their private label product offerings, which provide high-quality products at a lower cost than branded products. This has helped increase customer loyalty and contributed to the growth of online grocery sales. Many online grocery stores are partnering with other retailers or acquiring smaller companies to expand their product offerings and increase their customer base. This has led to the development of new channels for online grocery sales, such as through social media platforms or meal delivery services. In addition to that, to meet the increasing demand for online grocery orders, some retailers are opening dark stores or micro-fulfilment centres dedicated solely to fulfilling online orders. These stores are typically located in urban areas and allow for faster and more efficient order fulfilment. Virtual marketplaces, such as Amazon Fresh and Walmart Grocery, are gaining popularity in the online grocery market. These marketplaces offer a wide range of products from multiple brands, allowing customers to easily compare prices and products. With the rise of smart speakers and voice assistants, online grocery stores are adopting voice-enabled ordering systems to provide customers with a convenient and hands-free shopping experience. This technology allows customers to easily add items to their cart and place orders using voice commands.

Online grocery sales are expanding globally, with many retailers entering new markets and offering international shipping options. This is providing customers with access to a wider range of products and contributing to the growth of the online grocery market. As consumers become more health-conscious, there is a growing demand for premium and organic products in the online grocery market. Online grocery stores are expanding their offerings of premium and organic products, which tend to have higher profit margins. Online grocery stores are using data analytics to gain insights into customer behaviour and preferences, which allows them to personalise their marketing efforts and improve their supply chain management. This data-driven approach is helping online grocery stores improve their profitability and customer satisfaction. With the rise of on-demand services such as Uber and Postmates, there is a growing demand for on-demand and same-day delivery options in the online grocery market. Retailers are responding to this demand by partnering with on-demand delivery services and expanding their own delivery capabilities to offer faster and more convenient delivery options.