Neilsen says online grocery space to be preferred purchase channel for customers

With consumers being increasingly preferring digital channels for their purchases, the online grocery space is likely to witness traction, according to market research firm Nielsen. Grocery is definitely going to start seeing traction as e-commerce picks up, Nielsen executive director Ajay Macaden said at the India Food Forum here. He, however, did not quantify the size of online grocery market. As per reports the online grocery market in India is expected to be USD 5 billion by 2020, from USD 1 billion in 2017.

Macaden noted that packaged grocery is 40 percent in India versus a global average of 30 percent, while fresh groceries is around 41 percent against a global average of 26 percent which indicates that people are definitely picking up food online. The Rs 3.4 lakh crore Indian FMCG industry is growing at 14 percent, is largely dominated by food that accounts for 55 percent (Rs 2.2 lakh crore growing at 15.1 percent).

In terms of contribution, general trade accounts for 90 percent of FMCG sales, growing at 13 percent, while the remaining 10 percent is from modern trade that is growing at 22 percent. In the food category, general trade accounts for 90.1 percent at a growth rate of 14.7 percent, while modern trade is growing at 19 percent. He observed that the FMCG industry which grew at 13.8 percent growth in 2018 was largely a volume led growth that was 77 percent of the total growth.

(With inputs from agencies.)