“I used to have a steady stream of customers coming through my doors every day,” laments local grocer Hari Patel, S.G Palya, Bengaluru.
“But now, with many users ordering groceries through platforms like Swiggy and Blinkit, there has been a substantial decrease in sales at my store. People would rather pay a few extra rupees to have their groceries delivered than come here in person. It’s been a real challenge to stay afloat.”
Similarly, Priya Shah, Tavarakare from Bengaluru, who has run a family-owned supermarket for over 15 years, shared, “The rise of these delivery apps has absolutely swallowed our customer base. We just can’t compete with the convenience and discounted prices they offer. I’m really worried about the long-term viability of our store.”
The past few years have seen a seismic shift in the way consumers approach their grocery shopping. Spurred by the convenience and discounts offered by online delivery platforms, more and more people are opting to forgo the traditional brick-and-mortar supermarket experience in favour of the ease of a few taps on their smartphone.
The convenience and cost-savings of online grocery delivery have made it an increasingly attractive option for consumers across India. Services like Blinkit, Swiggy Instamart, and Zepto have seen a surge in demand, often at the expense of traditional brick-and-mortar grocery stores.
Goldman Sachs analysts valued Blinkit at $7.5 billion - more than 10x what Zomato paid to purchase the company in 2022. Zepto continues to grow at triple-digit rates and has scaled annualized revenue, akin to Blinkit’s GOV, from zero to more than $1 billion over the past 30 months, among the fastest companies globally to achieve this milestone.
According to Praveen Khandelwal, General Secretary of the Confederation of All India Traders, the projected trends for online grocery shopping over the next 5-10 years are substantial. “Through continued growth and market penetration, online grocery shopping is expected to keep growing significantly, driven by increased internet penetration, digital literacy, and consumer preference for convenience,” Khandelwal stated.
He further highlighted the anticipated expansion of various delivery models, including same-day delivery, express delivery, and click-and-collect services. Additionally, subscription-based models are expected to be introduced aggressively, potentially leading to further growth.
“The use of artificial intelligence (AI) and machine learning will enhance the personalization of online grocery shopping experiences. The increased adoption of voice and virtual voice-activated shopping through smart speakers and virtual assistants will gain traction,” Khandelwal noted.
“I used to dread going to the grocery store - the crowds, the lines, the hassle of lugging everything back home,” said Samantha, a 32-year-old marketing executive. “But with Blinkit, I can order everything I need in just a few minutes and have it delivered right to my door, often at heavily discounted prices. It’s a game-changer.”
Khandelwal also pointed out the integration of Augmented Reality (AR) and Virtual Reality (VR) technologies to enhance the shopping experience, allowing consumers to visualize products, explore virtual grocery stores, and access detailed product information in an immersive manner.
As infrastructure improves, online grocery services will expand into rural and underserved areas, providing access to a wider range of products and competitive prices. “Social media platforms will increasingly integrate shopping features, allowing consumers to purchase groceries directly through social media apps,” he added.
Echoing Samantha’s sentiments, 42-year-old homemaker Riya Kapoor shared, “With three kids and a busy schedule, online grocery shopping has been a total lifesaver. I can easily order everything I need from Swiggy Instamart while I’m on the go, and they’ll drop it off at my doorstep before I even get home. The discounts make it even better.”
Indeed, the numbers speak for themselves. Industry analysts report that online grocery sales have more than doubled since 2020, with platforms like Swiggy Instamart, Zepto, and Blinkit commanding an ever-larger share of the market. This surge in demand has come at the expense of traditional supermarkets, many of which have struggled to adapt to the new reality.
But for consumers like Arjun Sharma, the benefits of online grocery shopping far outweigh any downsides. “With Zepto, I can get all of my essentials - from fresh produce to household items - delivered to my doorstep in under 30 minutes, often at prices that are 20-30% lower than the local market,” he said. “Why would I ever go back to the hassle of in-person shopping?”
As the trend toward online grocery shopping shows no signs of slowing, the concern is that the rise of these delivery platforms could have significant long-term implications for local communities and small businesses.
Khandelwal also highlighted the need for sustainable delivery options to reduce the environmental impact of grocery operations. “Implementing systems that encourage consolidated deliveries can reduce the number of trips needed, thereby decreasing the overall environmental impact,” he stated.
He suggested using electric vehicles (EVs) and eco-friendly transportation, optimizing delivery routes using AI-powered software, and adopting green packaging solutions.
“Using biodegradable, compostable, or fully recyclable packaging materials helps reduce waste and the environmental footprint of grocery deliveries,” Khandelwal noted. Additionally, energy-efficient practices in stores and warehouses, as well as partnerships with green organizations, can further enhance sustainability efforts.
“When people stop going to their neighborhood grocery stores, it’s not just that individual business that suffers - it’s the entire ecosystem around it,” warned Neha Gupta. “Those stores are often the lifeblood of a community, providing jobs, supporting other local enterprises, and fostering a sense of shared identity. Losing that can have a devastating ripple effect.”
Indeed, for small business owners like Patel, the threat posed by online grocery delivery is an existential one. “I’ve been running this shop for over 20 years, and it’s been a proud part of this community,” he said. “But now, I’m barely hanging on. If this trend continues, I don’t know how much longer I can keep the doors open.”
However, not all physical grocers are feeling the same level of pressure. Amit, the owner of a neighborhood grocer in S.G Palya, Bengaluru, said, “While we’ve certainly seen some shift towards online ordering, our core customer base has remained loyal.
Our consumers mainly comprise college-going students who find it flexible to purchase whenever needed from the shops on their way to campus or back. People still value the personal touch and ability to pick their own produce that you can’t get from an app. As long as we keep providing great service and quality, I’m not too concerned about the competition.”
“The balance between online and mainline grocery shopping is expected to shift significantly over the next 5-10 years,” Khandelwal stated. He emphasized that the online grocery market is projected to capture a larger share of total grocery sales. While mainline grocery shopping will remain dominant, the convenience and advancements in technology will push more consumers to shop through mainline.
“The key is to foster adoption of technology by mainline businesses,” he explained. “Estimates suggest that online grocery sales could account for 10-20% or more of the total grocery market, depending on the region.”
The boundary between online and mainline shopping will blur, with many consumers adopting a hybrid approach. Shoppers will increasingly use online platforms for recurring purchases and bulky items, while visiting physical stores for fresh produce, perishable goods, and immediate needs.
Click-and-collect services will bridge the gap, allowing consumers to combine the convenience of online ordering with the immediacy of in-store pickup.
As the future of the grocery industry grows increasingly digital, the question remains: at what cost to local communities and small businesses? It’s a complex issue without easy answers, but one that is sure to shape the retail landscape for years to come.
Talking on the future outlook regarding the retail market, Khandelwal emphasised the importance of integrating new technologies such as AI, IoT, and blockchain to enhance both online and mainline shopping experiences.
“AI can be used to analyse customer data and provide personalised product recommendations, tailored promotions, and customised shopping lists based on past behaviour and preferences,” he explained.
“Internet of Things (IoT) can lead to smart inventory management and real-time tracking,” Khandelwal added. “IoT sensors can monitor stock levels in real-time, automatically triggering replenishment orders to maintain optimal inventory levels.”
Blockchain can provide transparent and tamper-proof records of product origin, movement, and handling, enhancing trust and ensuring product authenticity and quality.
Economic factors like inflation and changes in consumer spending power can significantly impact the grocery retail market. “Retailers must adopt flexible strategies, leverage technology, and focus on value-oriented offerings to navigate these challenges and meet changing consumer demands effectively,” Khandelwal advised.
He also emphasized the importance of R&D in driving future growth and differentiation in the market. “Continuous research on trade issues, exploration of better, new and innovative business opportunities, and making cost-effective trading can lead to robust growth in businesses and thereby boosting the economy,” Khandelwal concluded.
As the grocery industry continues to evolve, these insights and strategies will be crucial in shaping the future of both online and offline grocery shopping, ensuring a balanced and sustainable growth trajectory for the sector.
For many consumers, the convenience and cost savings are simply too compelling to ignore. But for the local grocers and small businesses that have long anchored their communities, the rise of delivery apps poses an existential threat that could have lasting, far-reaching consequences.
(The writer is an intern with businessline’s Mumbai bureau)