OFFLINE GROCERY MARKET IN INDIA

KEY FINDINGS

• The offline grocery market in India is set to grow from 2024 to 2030 though it is facing competition from quick commerce and other online retailers 
• The ability to touch and feel the product is the top reason for the continued popularity of in-store shopping. 54% of the individuals prefer offline grocery shopping due to the assured authenticity and quality of products
• In the country, 90% of retailers make more than half of their sales offline. Grocery is among the top segment where people opted for the offline market
• The growth will come on the back of higher realisations due to commodityinflation, market share prised from the unorganised segment, and despite heightened competition from quick commerce players
• 82% of offline retailers saw that their business growth is the same, or has seen an increment in sales.Only 12% of the retailers have witnessed a decline in sales due to the large number of online marketplaces
• Besides, approximately 50% of respondents are loyal to their local stores, with multiple generations of a family often shopping from the same retailer leading to trust and familiarity.
• The key drivers of in-storegroceryshopping for Indians are--offering quality and authenticity of products, familiarity with specific stores, and preference for supporting local businesses
• Only 10% of Indian shoppers are shopping exclusively on online selling platforms forgroceries.
• At least 45% prefer buying from local markets, 21% from weekly markets, 3% from wholesale markets, 19% from local vendors, and 5% from organized retail stores
• About 73% of consumers find fresh produce (grocery) ordered online to be of “low quality”, while 56% of respondents complained of “high prices”
• only 7% favor the purchase of fruits and vegetables online over offline due to ease of buying, while 66% prefer local or weekly markets.
• India is among the top 3 countries in the Global Grocery Retail market, and offline sales channel is the major contributor to it.

OFFLINE GROCERY MARKET IN INDIAMARKET OVERVIEW

The food and grocery retail segment, including staples, beverages, snacks, and packaged food items, was valued at over US$660 billion, contributing 55 percent to the total retail sales in India. Organized offline retailers are facing stronger competition from quick-commerce entities delivering groceries in minutes.

While both models are expected to co-exist, offline retailers continue to hold sway as they cater to customers for their larger weekly or monthly grocery shopping, as opposed to quick commerce, which typically caters to smaller, unplanned purchases. More than 60% of retailers have adopted digital payments at their stores for ease of payment and a hassle-free buying experience for their customers.

Operating margin is expected to remain largely stable this fiscal, asgroceryretailers pass on the sharp increase in the price of goods and continue with cost-optimisation measures.It is expected that the grocery retail market in India will reach approximately $1.10 trillion by the year 2030. The traditional “kirana” stores dominate the Grocery  market , covering 90% of the market with more than 12 million stores.

Another significant trend that has emerged is large retailers (Reliance 7-Eleven stores, Tata Fresho stores, D-Mart and many more) collaborating with local kirana stores to help manage efficient delivery and expand their networks. The future growth of the grocery segment in India is likely to come both from semiurban (Tier 2 and Tier 3 cities) and rural areas, and people in these area prefer offline shopping for groceries over online.

With a rapid pace of urbanization, emerging cities and semiurban areas are likely to witness an increase in monetary value of consumption of grocery items (value growth). Rural areas, however, are likely to witness an increase in quantity of consumption (volume growth)

OFFLINE GROCERY MARKET IN INDIA INTRODUCTION

The Indian retail industry has significantly evolved with time. The growth trajectory of organized Indian retail is marked by certain significant increases in Grocery consumption. Grocery consumption amounts to half the total of the country’s retail consumption and offline holds the majority of the stake in the market.

In 2010, the Indian community was skeptical about the survival of kirana stores because of the emergence of supermarkets/hypermarkets. However, more than a decade later, kirana and small stores are surviving due to the service specialty involving personal touch, monthly credit and proximity to the consumers. Organized grocery retail in India is highly competitive, with a few big players trying to lure consumers with lucrative offers.

They want to give consumers a unique experience of shopping with properly stocked shelves and a neat and tidy, well-lit space with a variety of products to stimulate the consumers to purchase them.

The supermarket format is the most prevalent in Indian markets, which is estimated to be around 49%, followed by convenience stores (43%) and hypermarkets (8%) in 2021. In 2021, the number of modern grocery retail outlets increased to more than 8,000, but this number is quite small compared with traditional grocery retailers (kirana stores and corner shops), which amount to around 12.8 million stores

OFFLINE GROCERY MARKET IN INDIA SIZE AND FORECAST

The Offline Grocery Market In India is accounted for $XX Billion in 2023 and is anticipated to reach $XX Billion by 2030, registering a CAGR of XX% from 2024 to 2030.

MAJOR SHIFTS IN THE OFFLINE GROCERY MARKET IN INDIA

• United Payments Interface (UPI) transactions at retail stores in rural and semi-urban India rose 118% in 2023 from last year, marking the increasing adoption of online payments in Tier-II cities. By value, the transactions were up 106%.
• The acceptance of Mobile Point of Sale (mPOS) increased by 5% in 2023, both have impacted offline grocery shopping as it has made the experience smoother

MAJOR MERGERS AND ACQUISITIONS IN THE LAST 5 YEARS

TYPES OF RETAILERS IN INDIA'S OFFLINE GROCERY MARKET

Organized Grocery Retail. Organized grocery retail in India is highly competitive, with a few big players trying to lure consumers with lucrative offers. They want to give consumers a unique experience of shopping with properly stocked shelves and a neat and tidy, well-lit space with a variety of products to stimulate the consumers to purchase them.

Traditional (Unorganized) Grocery Retail.Traditional grocery retail stores are the largest segment, with around 12.8 million stores. The size of traditional grocery stores varies from 100 to 1,000 square feet – most of these stores measure less than 500 square feet. The customization of local preference by the traditional grocer is their greatest strength, apart from personalized care, credit facility and home delivery provided to the consumers

OFFLINE GROCERY MARKET IN INDIAMARKET SEGMENTATION

Offline Grocery Market In India By Tier

• TIER - 1
• Tier - 2
• Tier - 3
• Other

Offline Grocery Market In IndiaBy Product Category

• DairyProducts
• Fresh vegetables and fruits.
• Packagedfoods item
• Personal care
• Other

Offline Grocery Market In IndiaBy Retailer Type

• Organized Grocery Retail
• Traditional (Unorganized) Grocery Retail

OFFLINE GROCERY MARKET IN INDIA:COMPANY PROFILES

• Big Bazar
• D-Mart
• Reliance Retail
• More Retail
• Star bazar
• Easyday 
• Patanjali