As companies from Reliance to Amazon put their top dollar in serving daily grocery at your doorstep, a new report said on Friday that online grocery is going to be the next battleground for growth, expanding to over $18 billion by 2024.
According to a joint report by a joint initiative by Bengaluru-based market consulting firm RedSeer and Bigbasket (Brand Intelligence), driven by the significant rise in organic adoption during Covid-19, eGrocery has been on a surge with clocking 1.7 times in gross merchandise value (GMV) in June this year as compared to January.
Online grocery will remain steady for the rest of the year to reach more than $3 billion, the report mentioned.
“The industry has seen more than 70 per cent ARR (annual recurring revenue) jumps in the last quarter across categories. This brings the opportunity to serve a larger set of customers, and some challenges with it,” said Hari Menon, co-founder and CEO of BigBasket.
The report found that demand for comfort foods like noodles and cookies, immunity boosters like lemon and hygiene products like sanitizers picked up after the pandemic while essentials remained strong.
Snacks and branded foods grew by 5 per cent quarterly pre-Covid, however growth jumped to 75 per cent in the June quarter.
Within snacks and branded foods, biscuits and cookies was the largest sub-category and grew the most in Q2.
Beverages grew by 2 per cent quarterly pre-Covid, however growth jumped to 50 per cent in Q2.
“Personal Care grew by 5 per cert quarterly pre-Covid but jumped to 24 per cent in Q2 due to Covid.
“We have observed that traditional brands which pivoted quickly to be digitally ready brands have seen 2x+ jump in sales compared to offline brands. We are excited to have this opportunity to serve the ecosystem,” said Anil Kumar, founder and CEO of consulting firm RedSeer.
Home utilities grew by 6 per cent quarterly pre-Covid but jumped to 11 per cent in Q2.
Within home utilities, detergents and dishwash were the largest sub-category but grew the least in the last quarter.
According to the report, home utilities were not severely affected by the pandemic.