Covid-19 accelerates growth of online grocery markets in India

India’s online grocery market grew by 80 percent to $2.66 billion in 2020 primarily due to COVID-19 and the resulting lockdown. The sector is expected to grow exponentially over the next few years thanks to expanding internet connectivity and rising consumer demand for convenience, value, safety/hygiene, ease of payment, and product variety.

Opportunities for U.S. exporters exist in consumer-oriented products, especially tree nuts, fruits, and packaged/processed foods.

India’s online grocery sector - a small but expanding market
Although online grocery sales represent less than one percent of total grocery sales in India, this sector is expected to experience tremendous growth in the next decade. India’s grocery retail sector is considered the third largest in the world and reached sales of $410 billion in 2020, according to Euromonitor International. The sector is dominated by traditional and unorganized retail formats, specifically hawkers and neighborhood shops called kirana stores (similar to mom & pop stores in the United States), which represent 90 percent of the market in sales.

The remaining 10 percent is made up of modern grocery retailers (such as supermarkets and hypermarkets) and e-commerce. In 2020, online grocery sales grew by 80 percent to $2.66 billion as COVID-19 compelled consumers to shop more online due to lockdown restrictions and safety concerns. During this period, consumers shifted their attitudes towards grocery e-commerce and began to see it as the most convenient and safest way to procure essential supplies.

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