Contactless Payments and Fresh Grocery Demand Drive Growth in Europe’s Online Grocery Market 2032 | FMI

In the European Online Grocery Market, leading players are strategically focusing on expanding their consumer base. Substantial investments in promotional campaigns have been instrumental in driving market growth. Additionally, manufacturers are leveraging social media apps like Facebook and Instagram to directly engage with existing and potential customers, effectively expanding their reach.

The increasing adoption of advanced technologies, including artificial intelligence (AI), the internet of things (IoT), and big data, further contributes to the market’s expansion. These technological advancements enhance operational efficiency, improve customer experiences, and play a significant role in driving the overall growth of the online grocery market in Europe.

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Future Market Insights (FMI) predicts an impressive 23% CAGR for the global online grocery market. The market is expected to reach US$ 2778.4 billion by 2032, up from US$ 350.55 billion in 2022. In its latest report, FMI studies the scope for expansion of the market across the globe and examines investment feasibility in key segments.

Online grocery shopping has been popular among younger generation, but COVID-19 outbreak pulled this novel form of shopping to mainstream. Apart from millennial, which account for more than 32% of the global population, online grocers also witnessed sizable traction from new customer archetypes. These customer groups were geriatric and sub-urban consumers. Witnessing traction from such a diverse customer archetype, online grocers also worked on their offering and expanded the portfolio of products and inventories.

Driven by the increasing consumer spending, improving rate of employment and overall economic growth, online grocery shopping has spurred. Several brands have reported a Multifood surge in sales as a direct consequence of strategies undertaken to boost their online presence and portfolio.

Following e-commerce boom, online grocery shopping is gaining momentum – a trend which is unlikely to subside in the near future. FMI offers valuable insights into the online grocery market. Some of these are:

  • Personalized and smart packaging are likely to dominate the online grocery shopping scene. FMI’s data, revealing that packed food has comfortable lead over other product types, reiterates the same observation
  • Presence of a high percentage of millennial has sealed East Asia’s position as a highly lucrative market for online grocery
  • Subscriptions segment is poised to surge at a higher CAGR among purchaser type. Subscription based online shopping is expected to gather steam as consumers look for better convenience and personalized solutions

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Economists at FMI says that online grocery shopping is one of the fastest growing sectors in the U.S. retail. As the number of online shoppers grow it is expected that e-retailers would focus on unique strategies. For instance, many of established e-retailers are partnering with small and medium service providers who would help them with door-step delivery to consumers.

 Besides leveraging strategic collaborations, several e-retailers are innovating smart packaging solutions to improve overall purchase experience. QR codes are often used to offer special discounts and coupons to customers.

Overall, there is increasing focus on digitizing solutions to cater to the changing consumer needs. For instance, Amazon.Com Inc. has invested heavily in the development of its integrated and high-tech logistics. Through this, it intends to expand its network and geographical footprint.

With several innovations and technological developments underway, the online grocery market is poised to surge exponentially in the near future.

COVID-19 Outbreak Ushered a New Dawn for Online Shopping

COVID-19 outbreak has ushered a new era for online shopping. The unprecedented spread of the virus brought about several changes in consumer behavior. There is at least one spending shift that is bound to stick around even after coronavirus passes: buying grocery online.

The U.S., China, and India exhibit a high demand for groceries. Instant gratification has remained the unique selling proposition (USP) of brick and mortar stores, giving them an edge against online shopping. The table has however turned in favor of online grocery.

Stay-at-home orders have affected just over 300 million Americans, changing their retail habits forever. In the wake of COVID-19 pandemic, daily ecommerce sales nearly doubled itself between March and April.

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Grim sales outlook following the COVID-19 outbreak and onslaught brought about by ecommerce behemoths have compelled even the most formidable brands to rethink their strategies.

Target and Walmart are two retailers holding themselves up against the perils brought about by the pandemic. Both had realized that online grocery was the key to avoid further wounds by Amazon.com a long ago. Accordingly, they invested in improving their online presence.

This robust uptake of online grocery shopping among consumers is not a phrase rather experts believe this could might as well be a reflection of permanent change in consumer behavior.

Who is winning?

Some of the key players operating in the online grocery market are Amazon.com Inc., Walmart Inc., The Kroger Co., Peapod LLC, Fresh Direct LLC, Target Corporation, Publix Super Markets Inc., Best Buy Co. Inc., Instacart, Costco Wholesale Corporation, Safeway Inc., Carrefour S.A., Tesco PLC, Edeka Group, Aldi, Alibaba Group, JD.Com, Honestbee, Grofers India Pvt. Ltd., Avenue Supermarts Ltd. and among others.

Several online grocery/ e-retailer companies are entering into strategic partnerships with prominent retailers to cater to the growing demand for groceries and other essential items.

  • Walmart Inc. has entered into a strategic partnerships with four third-party delivery providers which are Point Pickup, Skipcart, AxleHire, and Roadie to help the company provide on-time delivery to its customers
  • In India Domino’s Pizza, Uber, Rapido, Swiggy, Zomato, and other have ventured into grocery delivery in collaboration with online grocers such as BigBasket and Grofers and retail chains such as Big Bazaar and Spencer

Market Segmentation

Product Type:

  • Packed Foods
    • Snacks
      • Chips & Crisps
      • Salty Snacks
      • Dried Fruits
      • Mixed Nuts
      • Popcorn
    • Baked Products
      • Cookies
      • Cakes & Pastries
      • Breads & Rolls
      • Frozen Desserts
      • Confectioneries
    • Breakfast & Cereal
      • Cereal & Breakfast Bars
      • Granola & Muesli
      • Energy Boosting Breakfast
      • Others (Syrups, Pancakes, etc.)
    • Ready To Eat Foods
      • Instant Noodles
      • Pasta
      • Sandwiches
      • Smoked Fish
    • Ready To Drink Beverages
      • Aseptic Juice
      • Iced Tea
      • Flavored Milk
      • Soft Drinks
      • Energy Drinks
      • Instant Coffee
      • Canned Sodas
      • Non-Alcoholic Drinks
    • Dairy Products
      • Milk
      • Yogurt
      • Cheese
      • Butter
      • Others
    • Staples & Cooking Essentials
      • Salt & Spices
      • Sauces
      • Coffee/ Tea Powder
      • Pickles
      • Oils/ Vinegar
      • Honey/ Jam
  • Fresh Produce
    • Fruits & Vegetables
    • Meat & Seafood

Purchaser Type:

  • One Time Purchase
  • Subscription

Delivery Type:

  • Home Delivery
    • Company Owner Stores
    • Third-Party Stores
  • Click & Collect

End User:

  • Individuals
  • Distributors

By Region, Online Grocery Market is Segmented as:

  • North America
  • Latin America
  • Europe
  • The Middle East and Africa
  • East Asia

About Future Market Insights, Inc.

Future Market Insights, Inc. (ESOMAR certified, Stevie Award – recipient market research organization and a member of Greater New York Chamber of Commerce) provides in-depth insights into governing factors elevating the demand in the market. It discloses opportunities that will favor the market growth in various segments on the basis of Source, Application, Sales Channel and End Use over the next 10-years.

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About the Author

Ronak Shah

Associate Vice President at Future Market Insights is deeply committed to uncovering actionable insights for consumer and food and beverage players. She brings a unique blend of analysis, industry trends, and consumer behavior to put data into perspective.

What she makes out of data becomes a delight to read. She has authored many opinions, including for publications like Process Industry Informer and Spinal Surgery News, as she understands the market pulse and consumers' shifting preferences.

She likes to bring experts to a roundtable to weigh the impact of a trend on an industry. Catch up with her discussion on the impact of AI in packaging.

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