2020 accelerated digital adoption in many ways in India. Be it edtech, OTT, gaming, content, digital came to all’s rescue. One of the biggest beneficiaries among these, has been e-grocery which saw massive adoption during the pandemic. The essential-centric eGrocery market grew at a lightening 70%+ pace last year and is expected to keep up with the health pace and grow 8-times in size in the next 5 years.

However despite this, getting convenient access to affordable groceries, remains a key unmet need in the larger part of India. Based on this vast opportunity, here are the key takeaways from the recently released report on the Value-first grocery opportunity in India, which is set to be disrupted by the eGrocery platforms.

1. More than 60% of the huge ~$300 Bn eGrocery addressable market is led by value-first households

eGrocery Addressable Wallet by HH Group USD Bn, % of addressable wallet

Although the eGrocery sector received a significant boost from COVID, eGrocery platforms still penetrate less than 1% of the grocery space in India. Out of the huge ~$300 Bn untapped addressable opportunity for eGrocery, more than 60% is led by value-first households.

2. Value-first HHs express solid preference towards the best priced-products and tend to plan a significant part of their grocery purchase

Addressable HHs grocery purchase behavior analysis, Price sensitivity, Need for wider assortment, Need for timely access

Note– Size of the bubble indicates need for faster access – more the size, higher the need

The ‘value-first’ segment refers to the households in India, for whom affordability is the key pain point and hence buying low-priced grocery is of the utmost importance. We came across different types of value-first consumer profiles in our detailed interactions, and almost all of them were highly sensitive to price and had very limited need for wider assortment or faster deliveries.

Driven by this need for affordable groceries, value-first households stock-up a considerable portion of their groceries and focus largely on basic categories like fresh and staples. Although a dominant portion of the value-first opportunity is scattered in Tier 2+ markets, a significant 40%+ segment is concentrated in the top 60 metro and tier 1 cities, where most of the eGrocery platforms currently operate.

3. Led by the basic & limited needs of the value-first HHs, the unit economics of serving them through eGrocery are quite favorable

eGrocery Household Attribute Comparison Summary

Our estimates suggest that the unit economics associated with serving the value-first households through eGrocery, are quite favorable because of their basic requirements. Bulk buying behavior and limited demand for faster deliveries, significantly bring down the delivery costs. Moreover, need for focused assortment and private labels, leads to better retail margins that can be passed on to consumers to solve for affordability.

4. Value-first eGrocery segment is projected to account for ~55% of the eGrocery market in 2025

eGrocery Market Estimates GMV, USD Bn

Driven by the huge & profitable opportunity that value-first households offer, we forecast that from here on, this segment will grow faster than the eGrocery market and cover ~55% of the eGrocery business in 2025. Hence, eGrocery platforms serving the value-first households in a focused manner, are likely to benefit from this opportunity.


  • Mrigank leads business research and strategy engagements for leading internet sector corporates at Redseer Strategy Consultants. He has developed multiple thought papers and is regularly quoted in media and industry circles.