The covid-19 pandemic has forced people to buy essential items online due to lockdowns and to avoid covid infection. In India, the online grocery market has shown promising growth as well as tough competition due to the involvement of business giants like Reliance, Tata Digital, Amazon, and others.
The recent investment of Zomato in Grofers has made the competition more interesting. As per Bank of America’s recent report, Big Basket, recently acquired by Tata Digital, has hit a $1 billion annualized gross market value(GMV).
Will there be a change in the online grocery ecosystem in terms of overall growth and the ranking of current players. This article will give you an insight into that.
Online Grocery Players’ Recent Operations
Big Basket, Grofers, Amazon, JioMart, Flipkart, and others are the key players in the online grocery delivery system. As per the recent report published by Bank of America Analysts, Big Basket tops the list of Indian online grocery players with a $1 billion annualized GMV. To achieve that position, Big Basket is selling 3 lakh items daily.
Grofers is the distant second position holder among all Indian online grocery players. As per the fiscal year 2020 report, Grofers recorded a revenue of Rs 176.79. While Big Basket clocked a total revenue of over Rs 3818 crore in FY20.
Grofers got a big boost recently when it raised $120 million from Zomato and Tiger Global. Current funding will help the online grocery startup to reach the $1 billion mark. And, it will be the 17th Indian startup to join the unicorn club in 2021. Grofers will use current funding to expand its operations in more cities across India. That may change the scenario in the future.
As per market experts’ analysis, Zomato’s investment in Grofers is the first step towards acquiring the startup in the future.
Tata Digital will also leave no stone unturned to continue the domination of Big Basket in the online grocery market. To do so, Tata Digital invested $200 million in Big Basket after acquiring the majority stake. As per recent reports, Big Basket has over 37% share of the e-grocery market of India. Big Basket will become a more stable brand in the future due to the partnership with Tata, the most trusted firm in India.
Online Grocery Sector Growth with JioMart, Swiggy, and Others
JioMart, a subsidiary of Reliance Retail, has the potential to change the online grocery sector completely. It launched its app in May 2021 to provide services in over 200 cities of India.
In a recent 44th annual general meeting of Reliance Industries, Mukesh Ambani announced that Reliance Retail targets to add 1 crore Kirana partners in the next three years.
Other than these players, Amazon, Flipkart, and Swiggy are also showing positive progress to capture the market. Softbank’s vision fund to invest in Swiggy a whopping $450 million to expand its grocery delivery business. Dunzo, the local delivery service provider, is a new startup supported by Google. The local grocery service provider in major cities like Bangalore, Chennai, Delhi has expanded its business very well.
As per Dunzo’s claim, the startup has doubled its business in the last 75 days and processes over $200 million in annualized gross merchandise (GMV) value. As per the latest reports, Tata Digital is in advanced talks to take over Dunzo. And, the deal may be finalized with an amount of around $150-$200 million. Though, Dunzo declined any such development.
Bank of America Analysts also estimated that the online grocery market in India will be worth $12 billion by 2023. PGA Labs data suggest that Grofers had a 13% market share in FY21, while market leader BigBasket had 37% and Reliance’s JioMart 4%. PGA Lab’s estimation has predicted a $22 billion online grocery market in India by 2025. The online grocery market is worth $3 billion based on last year’s revenues earned by market players.