Setting up an online grocery business in 2021

Make your mark in the pandemic-hit world with the burgeoning e-grocery segment.

In the upcoming years, offline food and grocery stores will see reduced customer numbers, while online grocery stores will see a mushrooming of customers. Improved methods of delivery land robust modes of logistics will bolster the services of grocery shops online even further.

Why online grocery? 

In this digital era, customers want instant, high-quality support. Staying offline and depending on the traditional retail models are no longer an option for such Kirana stores, especially with so many more significant players in the food and grocery retail market segment . 

Especially in the light of the COVID-19 pandemic, government lockdowns are making it impossible for offline stores to run the businesses properly. Therefore emphasis must be laid on online e-grocery models . The firms adopting online deliveries are likely to survive in the long run, as setting up an online grocery shop doesn’t have the hassles, unlike brick and mortar stores. E-commerce gains a competitive edge owing to its lesser workforce, increased focus on automation of stocking and logistics, and same-day/door-to-door delivery provisions.

The prepaid payment method leads to less cart abandonment and is free from tactile contamination, which is a necessity in light of the present-day pandemic. All these aspects make online grocery business a profitable venture.

Current online grocery market trends

Looking at the industry analysis for online grocery from the last year, purchases of CPG (consumer packaged goods), as well as fresh groceries, enjoyed a consistent growth spurt of about 36% each year. Such exponential growth has exceeded the market projections made and has triggered a race among global entrepreneurs looking forward to launching their very own e-grocery store. The quicker one moves, the more chances of success in this booming industry.

With the evolution of e-commerce, consumers have grown accustomed to the benefits of buying goods online. The past hurdles faced by the initial players of eCommerce sectors have now been removed, as consumers trust to go for prepaid transactions, including the payment gateways of e-grocery services. Grocery shops online ensure doorstep delivery and preferential selection of delivery slots.

Challenges associated with the online grocery market

The online grocery market is fraught with challenges. Some such challenges of online grocery marketing are:

• Delivery charges: It is undoubtedly one of the significant obstacles of online grocery stores. Many potential customers aren’t willing to buy the products from grocery shop online as it will cost more due to delivery charges. Yes, it is convenient, but they can get the same goods in the local retail stores if they are willing to go out. There are provisions of free delivery, but that applies only when the customer places an order of certain limits.
• Difficulty in reaching rural areas: Online grocery shopping may be a hot and happening trend in Tier-1 and Tier-2 cities, but in the rural areas, it’s just the opposite. Even if some people in small towns know the concept of online grocery marketing, they aren’t willing to give it a try as there are many retail stores in the local markets. The dwellers love visiting those stores as they have been doing since times immemorial. Convincing them is a hard nut to crack for online grocery marketers.
• Improper management of inventory: The inventory-led business model is the trademark approach of most online grocery startups. As everything has its shortcomings, it is not an exception. Here, the organisation needs to deal with warehouse rental costs for storing the inventory in a proper place. It is suitable for companies only with a strong financial backup.

Future avenues of the online grocery business

Many market reports suggest that the e-grocery market across the globe would grow five folds over the next decade. This promising forecast brings in newer players in this booming market segment almost daily. Established players like Big Basket and necessary Grofers further bolster their business models by adding newer customer benefits.

While before the COVID-19 pandemic, only a small number of networked households were buying groceries online, the total figure of customers worldwide has been forecasted to jump up to about 70 per cent.

Online food and grocery retailers who provide interactive website experiences to the consumers can. They carry a lesser competitive edge in the online grocery market segment . Numerous online grocery stores are popping up almost every day, while big e-commerce players have received millions of dollars worth of funding for their e-grocery ventures.

E-grocery is forecasted to become one of the fastest-growing e-commerce sectors in the coming years, reaching its peak capability by 2024. The leading players of the global grocery businesses have all now started to offer online grocery services for their customers. Upon doing so, each of such players has witnessed increasing customer satisfaction levels compared to the past decade.

Mobile app services provided by online grocery stores like Big Basket and Grofers and rapid improvement in the speed of delivery, and the availability of same-day delivery slots have made customer experience for food and grocery services better than ever. Such mobile apps and interactive websites contributed hugely to the overall sales of grocery stores across the globe.

According to a YRC expert, "eGrocery market analysis goes on to show that by the end of the current year, nearly 20 million new consumers will adopt online grocery shopping. Out of them, about 90% would want to use at-home delivery, while the rest of them would go in for in-store pick-up. Opportunities of online grocery business are increasing by leaps and bounds; therefore now is a ripe time to invest in the same."

Why choose YRC for setting up your online grocery business?

To start an online food and grocery retail store or build a supermarket chain, it is better to depend on experts in the field. Globally, over the years, YRC (Your Retail Choice) has been the trusted consultant for many offline and online retailers. It has provided advice to newcomers and existing businesses, whether in drawing online grocery business plans or CPG business analytics, or consumer goods supermarket expansion.

The online food and grocery sector has been increasingly competitive, as newer players realise the untapped potential of the same. YRC is a reputed FMCG consulting agency whose in-house experts can meet various requirements. As the industry continues to evolve, YRC anticipates market trends and emerging technologies to provide its clients with timely and valuable business advice and strategic help.

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YourRetailCoach
Category: eCommerce Solutions and Developers Profile: Your Retail Coach (YRC) is a retail consulting and outsourcing company in India offering a wide range of services in retail offline, retail eCommerce, and retail omnichannel catering to a multitude of industries. Your Retail Coach (YRC) helps retailers and retail enterprises set up their eCommerce business right from planning (eCommerce business consulting) to implementation. Our experience and expertise in both offline and online retail channels will help businesses overcome challenges in adop ...