India: a food retail sector flourishing through e-commerce and innovative strategies

Despite being one of the economies hardest hit by the Covid-19 pandemic, India promises a spectacular recovery, with a growth rate of 8%, according to the World Bank. With 1.39 billion people, India is the sixth-largest economy in the world and the second-most populous country, after China; 65% of the population are under 35 years of age. A more consumer-oriented approach is now beginning to take hold in India, with trends driven by the rise of millennials and a greater number of high-net-worth professionals. These consumers demand more food safety, convenience, added value and healthy foods. In addition, importers are focusing increasingly on brands, large retailers are rolling out more modern points of sale and e-commerce platforms are proliferating.

Online shopping boom

Online fresh food retail has become one of the most dynamic business sectors in India due to the arrival of international players, who have strengthened considerably over the last two years as a result of the pandemic.

“Consumer trends are beginning to rule in India.”

Around 90% of the Indian market used to be controlled by traditional retail formats, specifically neighbourhood stores called “kirana”. But due to the mobility restrictions caused by the Covid-19 pandemic, home delivery and e-commerce have grown, improving the shopping experience and consumer safety. Previously, young people were the primary users of online grocery shopping, however the pandemic lockdown forced a critical mass of Indian consumers of all income and age levels to rely on online retail platforms to avoid in-person visits to stores. This drove dramatic growth of the online market for fresh produce in India, which expanded by 80% in 2020 to reach a value of US$2.66 billion. In the future, Indian consumers are expected to rely increasingly on e-commerce for their grocery purchases as they continue to adopt more digital lifestyles.