India online food, grocery retail to grow 55% by ‘23’: Report

at 12:13 pm
File Photo

New Delhi (NVI): Modern retail penetration which is currently at 10 percent or $82 billion of India’s total retail sector in CY2018 is expected to grow at 20 percent over the next few years to 11.8 percent or $118 billion by CY2020, according to a joint report by RedSeer Consulting & bigbasket on online food & grocery.

On the other hand, online retail which contributed 3 percent (CY2018) share will increase to 4.6 percent and 7 percent penetration in CY2020 and CY2023, respectively, the report stated.

Hari Menon, Co-Founder and Chief Executive Officer, bigbasket said, “The online grocery segment has been one of the fastest-growing e-commerce verticals in India and will continue to flourish in both metro and non-metro cities in the years to come. Online food and grocery retail, though at a nascent stage, with only 0.2 percent penetration is expected to grow at a whopping 55 percent to reach 1.2 percent of the overall market in 2023 and amount to $ 10.5 billion.“

Anil Kumar, Founder RedSeer Consulting said, “Share of modern retail segment will jump from 3.5 percent now to 6.7% in 2023 and of the online channel will witness 55% growth lending to a sizable $10.5 billion market by 2023.’’

“This retail food & grocery report offers comprehensive coverage across 40 categories marking key consumption sectors of a typical grocery basket. Unique insights garnered cover how online platform facilitate creation of niche sub-categories as well as evolution of challenger brands.” he added.

Pakhi Saxena, Head – Retail & CPG, RedSeer Consulting said, “The food & grocery compendium will enable brands to define potential consumer segments as well as index categories for scale, growth and premiumization.”

Increased comfort and trust of customers in e-tailing, especially electronics and fashion coupled with a strong value proposition of e-grocery players, the wide varied assortment and express delivery options, will drive this growth in the sector, the report stated.

Tier 1 cities are marked by low modern retail penetration vis-à-vis metro and mini metro cities and these modern retail stores are mostly located in the central region of these cities. Online channel has marked its presence across multiple catchments owing to wide product assortment and convenience offered by online platform, it said.

Although though India’s modern retail segment has considerable ground to cover, it is still growing at a slower pace compared to other geographies, Redseer added in its report.