Growth of online grocery shopping and its impact on consumer behaviour

Grocery delivery is currently dominated by a handful of players as of 2024. Chinese platforms like Alibaba dominate the market, followed by international players like Amazon and regional players like Zomato (India) and Rakuten (Japan). The stats discovered b our team may seem fascinating, but this industry is booming at a mad rate. That’s why, you must keep in on watch. 

The user penetration rate in Asia for online grocery delivery is estimated to be 18.0% in 2024, with the number of users reaching 166.7 million by 2028. (Source: Statista) The Asia-Pacific online grocery market is expected to be worth $528.20 billion by 2027.  

 

Walmart: The retail giant is leading the online grocery race, with a projected 26.9% market share in 2024. This surpasses Amazon's expected share of 18.5%. (Source: Retail Dive) The number of online grocery shoppers in the US is expected to increase to 151.5 million in 2024, up from 147.8 million in 2023.

Just 12.5% of all grocery sales in the US will be conducted online in 2024. However, this market segment is growing significantly faster than traditional grocery. 

This blog will look at how online grocery shopping is changing consumer behaviour. We'll explore what drives people to shop online, share some stats, and discuss what it means for business owners. 

Also Read: What are Consumer Insights: Meaning, Examples and Scope

Overview of the Online Grocery Shopping Market

A. Current Market Size and Projected Growth

Global Market Size: As of 2023, the online grocery market was valued at $260 billion and is expected to reach $1.3 trillion by 2027, with a CAGR of 24.8%. (Source: Mordor Intelligence)

Regional Variations: Growth varies across regions. North America holds the largest market share, followed by Europe and Asia. China dominates the Asian market, while the US leads in North America.

 

B. Key Players in the Online Grocery Industry:

Traditional Retailers: Walmart, Kroger, Tesco, Carrefour

E-commerce Giants: Amazon, Alibaba, JD.com

Delivery Platforms: Instacart, DoorDash, Deliveroo, Zomato, Rakuten, Swiggy, Flipkart. 

Specialty Grocery Players: Thrive Market, FreshDirect, Peapod

Emerging Players: Farmstead, Hungryroot, Misfits Market

 

C. Trends Driving Growth:

Convenience: The time-saving factor is a major driver, especially for busy families and professionals.

Increased Smartphone Penetration: Mobile apps facilitate easy ordering and on-the-go purchases.

Wider Product Selection: Online platforms offer a broader variety compared to physical stores.

Subscription Services: Recurring deliveries for everyday essentials add convenience and personalization.

Focus on Fresh Produce: Improved logistics and packaging ensure quality and freshness.

Quick Commerce: Ultra-fast delivery options (within 15-30 minutes) are gaining traction.

Sustainability Initiatives: Eco-friendly packaging and carbon-neutral deliveries are attracting eco-conscious consumers.

Also Read: Impact of Consumer Preferences on the Global Automobile Industry

Factors Influencing Consumer Behavior in Online Grocery Shopping

1. Convenience and Saving Time 

Online grocery shopping offers convenience by allowing consumers to shop from anywhere at any time. It saves time by eliminating the need to physically visit a store, navigate aisles, and wait in checkout lines. This is a major driver in both regions but with slight variations. In the USA, busy lifestyles and long commutes make time-saving a bigger priority.  In Asia, dense urban environments and access to delivery platforms further amplify the convenience factor.

2. Pricing and Discounts Compared to Traditional Stores

Consumers are attracted to online grocery platforms for competitive pricing and exclusive discounts. Comparison tools make it easy for shoppers to find the best deals, influencing their purchasing decisions.

3. Quality and Freshness Concerns

Concerns about the quality and freshness of products are common among online grocery shoppers. Trust in the retailer's ability to deliver fresh and high-quality items plays a significant role in consumer behavior.

4. Variety and Availability of Products

Online grocery stores offer a wider variety of products compared to traditional brick-and-mortar stores. The availability of niche or speciality items appeals to diverse consumer preferences and dietary needs.

5. Trust and Security in Online Transactions

Trust and security are paramount in online transactions, especially when it comes to purchasing groceries. Consumers look for secure payment methods, encryption protocols, and reputable retailers to ensure their personal and financial information is protected.

Understanding these factors is essential for businesses to tailor their online grocery shopping experience to meet consumer expectations. Check out this blog on: Top 10 Market Research Tools and Software

 

Impact on Consumer Buying Psychology

A. Shift in Shopping Habits and Frequency: Online grocery shopping has led to a notable shift in consumer shopping habits and frequency.

Consumers now have the flexibility to shop more frequently in smaller increments or consolidate purchases into fewer, larger orders.

B. Impulse Buying vs. Planned Purchases: The ease of browsing and purchasing online can lead to increased impulse buying. However, online grocery platforms also facilitate planned purchases through features like saved shopping lists and personalized recommendations.

C. Effects on Brand Loyalty and Brand Switching Behavior: The abundance of choices and easy access to information online has challenged traditional notions of brand loyalty.

Consumers are more willing to explore different brands and products, leading to increased brand-switching behaviour based on factors like price, quality, and user reviews.

D. Influence of Online Reviews and Recommendations: Online reviews and recommendations play a significant role in shaping consumer buying decisions.

Positive reviews and endorsements from trusted sources can influence consumers to try new products or brands, while negative reviews can deter purchases.

E. Integration of Technology in the Shopping Experience: Technology has revolutionized the online shopping experience, providing consumers with personalized recommendations and offers. Features like AI-powered recommendations and targeted promotions enhance the shopping experience, making it more tailored to individual preferences.

To effectively serve online grocery shoppers, businesses need to understand how these factors shape purchasing decisions. This understanding allows for targeted approaches like personalized recommendations and promotions, fostering stronger customer relationships and long-term success.

9 Key Insights from Poll Results, Surveys and Researches

1. According to an opinion poll conducted by PollPe, 46.56% of Indian consumers prefer to shop online groceries from Amazon Fresh. 

2. 23.1% of Indian consumers prefer Flipkart to buy groceries online. (PollPe Research). 

3. E-commerce sales globally are expected to reach $6.4 trillion in 2024, driven by convenience and wider product selection. (Source: Statista)

4. Impulse purchases: Impulse online purchases represent 4.4% of all e-commerce orders. (Source: Insider Intelligence)

5. 79% of consumers trust online reviews as much as personal recommendations.

6.  80% of consumers are more likely to do business with companies offering personalized experiences.

7. 81% of consumers have made impulsive purchases based on social media content. 

8. Targeted ads and emails drive 72% of consumers to make unplanned purchases. 

9. Easier online checkout processes increase impulse buying by 70%. 

 

Wrapping it up!

The future of online grocery shopping is promising, with continued growth expected as technology advances and consumer preferences evolve. Potential developments include further integration of artificial intelligence, enhanced personalization, and innovations in delivery logistics to improve efficiency and convenience for shoppers.

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