Available online at https://www.iimk.ac.

in/research/markconf20/

INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Online Grocery Industry in India: Identifying Key Themes

Abstract
Indian online grocery retail industry has emerged as one of the most dynamic and fast-paced industries due to changing
consumer preferences. This study focuses review of literature on factors that influence on online- grocery industry in
India. The factors that motivate buyers to shop-online and their attitudes towards online- grocery are studied. Insights
are provided into various themes with respect to online- grocery. A systematic searched was carried out on specialized
database sources: Web of Science and EBSCOhost. Furthermore Google Scholar searches were performed. Search
words and phrases included online grocery, e-commerce in India, online grocery stores, online retail, e-grocery, grocery
retailing. The integrative approach is used to shape the analysis of literature. Five themes were finally identified based
on extensive reviews of research articles. Finally, this study identifies several gaps and provides some orientation for
future research.
Keywords: Online grocery; review; e-retailing; online grocery stores

Introduction
The demand for online grocery retail is rising at a steady 25-30 per cent in Indian metros, according to
(KPMG, 2020) and is powered by urban residents who are in a rush and prefer comfort to kiranas. The global
food and grocery ecommerce market is expected to hit a mouth-watering $6.5 trillion by 2023 according to a
study by Euromonitor. The current COVID-19 pandemic has heightened unprecedented uncertainty and
complex challenges over retail industry. Remarkably in some cases, COVID-19 has accelerated demand of
online grocery businesses. Online grocery shopping has experienced solid growth and this medium is
expected to continue rising exponentially in the coming years.
Indeed, India has enormous growth potential for e-retail, with consumers increasingly moving to the
online shopping channel due to increased internet, tablet, and device penetration (Satnalika, 2016). Indian
Online Grocery market is projected to garner potential growth over the 2020-26F forecast period, according
to 6Wresearch.With 3G and 4G wireless networking technologies introduced, e-commerce is the future of
shopping, and the internet economy will continue to develop robustly. Online grocery shopping varies
greatly from general online shopping due to the product's perishable nature and consistency, and frequency
of shopping activity.
Establishing online grocery retailing is an important alternative to conventional brick and mortar
retailing, and issues such as meeting consumer needs and desires are crucial in terms of providing value for
money, fast and easy buying, smooth distribution processes, and reducing perceptions of risk (Siddiqui &
Tripathi, 2016). The report, conducted by 6Wresearch, said the online grocery market is currently at a
nascent stage and confined primarily to tier one region. It said attractive offers offered by online grocery
players are wooing customers, while grocery and staple segment are contributing large share of revenue led
by FMCG.

1
Research Scholar, School of Management (PG), MIT World Peace University, Pune, India, Sr. No 123, MITWPU
Campus, Paud Road, Kothrud, Pune, India, 411038 Email: pratikshaannadate06061995@gmail.com
2
Assistant Professor, School of Management (PG), MIT World Peace University, Pune, India
Sr. No 123, MITWPU Campus, Paud Road, Kothrud, Pune, India, 411038 Email: girishmude@gmail.com
Peer-review under responsibility of the 04th ICMTS 2020
ISBN : 978-93-5419-748-2
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At present, e-grocery growth is more about increasing consumer loyalty and gaining market share than
about economic gains (Saskia et al., 2016). From the customer's point of view, big online shopping benefits
were easy to order, choice at one shop and time savings, smartphone apps were perceived as a safer and more
convenient alternative than websites and phone calls. During online shopping freshness and delivery timing
were given more priority than payment system and pricing (Kumar & Kumar Timalsina, 2016).
Given the absence of public-domain scholarly literature, this research provides a forum for future
studies in this field. This paper is a deliberate effort to identify online grocery retailers' core principles that
are the key players in the grocery retail industry.
Differences in perception of related obstacles like inability to physically view the product, difficulty in
returning items, high delivery charges and time, and lack of social interaction with other shoppers have been
observed (Ghai & Tripathi, 2019). KPMG India's recently released study 'Customer Experience: The New
Operational Excellence' shows that good customer service is about comfort and pledge fulfilment in grocery
retailing.
This study focuses review of literature on factors that influence on online- grocery industry in India. The
factors that motivate buyers to shop-online and their attitudes towards online- grocery are studied. Insights
are provided into various themes with respect to online- grocery.
2. Review Methodology
A review of the literature was undertaken in July and August of 2020. We systematically searched the
following specialized database sources: Web of Science and EBSCO host. Furthermore Google Scholar
searches were performed. Search words and phrases included online grocery, e-commerce in India, online
grocery stores, online retail, e-grocery, grocery retailing. The integrative approach is used to shape the
analysis of literature. Additional papers were apprehended via the "snowball" method of using the most
recent works to find related articles referenced in them. Since keywords in research papers are not based on
standard lists, some of the literature is highly likely to have been overlooked.
3. Review Discussion
3.1. Rising online grocery industry in India:
Indian consumers have got addicted to online shopping and enjoy numerous online shopping features
like the rest of the world does. Web-stores are massive in different areas and in virtually all the divisions.
The younger population is the biggest attraction of this industry, and they can significantly contribute to the
growth of online shopping in India (Handa & Gupta, 2014). Internet shopping is a vast rising technology
which will flourish in a highly competitive and complex world if properly used with assured safety and
security for transactions. Given the increasing youth population, online shopping is bound to expand in a big
way in the future (Verma et al., 2016). Time is a significant problem in online grocery shopping and that
online grocery retailers may gain a competitive advantage through successful time management and that one
of the key reasons for customers to take part in online grocery shopping is the perceived time-saving aspect
of online grocery transactions (Weber & Badenhorst-Weiss, 2016). The key reason to buy online grocery
stores is to save time and effort. A customer's preferences are entirely different when shopping online and in
the physical market groceries (Vasic et al., 2019).
3.2. Preferences towards online grocery shopping:
In the retail sector, as far as grocery trade is concerned, customers still give preference to price and
testing, while packaging taste and appearance do not play a major role and even most customers are aware of
the brands available in the markets, but do not display willingness to switch their brand (Kothari et al.,
2016). Female shoppers gave credence to product prices; sales promotions, on the other hand, male shoppers
prefer the brand image of the store and ads (Rao, 2018). Modern retail is preferred more for branded and less
for perishable categories. Interestingly, the lower middle class share of modern grocery retail’s revenues is
largest, and this share is projected to grow as prices fall and store density increases (Narayan et al., 2015).
3.3. Consumer attitude towards online grocery shopping:
The attitude of consumers towards online grocery shopping in India is influenced by four factors:
Perceived Cost, Perceived Convenience, Perceived Danger and Perceived Enjoyable (Baheti & Kaushal,
2015). The manner in which online stores apply strategies to improve customer loyalty influences consumers
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buying decisions on the electronic marketplace (Pratminingsih et al., 2013). Consumers are also more
concerned about product quality among the numerous fear factors related to online grocery shopping, though
online grocery shopping has less social impact factors (Kaur, 2016). Customers are happy with their online
shopping experiences and positive attitudes towards them, but there are still many customers who are
apprehensive about electronic purchases and share their personal details (Hanus, 2016). Out of total non-
travel B2C e-commerce, online retail holds significant fifty percent share and its prospects for future growth
are extremely positive (Kalia et al., 2017).
3.4. Consumer perception towards online grocery shopping:
Consumer purchases products from the online shopping website on the basis of factors such as sales and
discounts, product selection available, free home delivery, website user friendliness and cash payment
choice. Customers expect enhancement of the website's user-friendliness in order to select online as a means
of buying grocery items instead of shopping with the conventional approach (Sathiyaraj et al., 2015). Online
grocery offers convenience, ease, privacy and time savings, but still some housewives and females employed
prefer to buy the grocery from physical stores due to factors such as confidence, negotiating ability, credit
facility and self-satisfaction of testing items tangibly before actual purchase. Female majority chose online
grocery because of Time Saving and Ease of Order (Rao, 2018)
3.5. Influence of different factors on online grocery shopping:
All variables eServQual, performance, availability of the method, fulfilment and privacy have a clear
positive relationship with the adoption of online grocery shopping. Both variables of situational causes,
antecedent conditions, temporal context and change in lifestyle also have a positive relationship with the
acceptance of online grocery shopping. However, the preceding states are related only moderately to the
adoption of online grocery shopping, while temporal states and lifestyle changes are weakly linked to the
adoption of online grocery shopping (Muhammad et al., 2016).
Online grocery shopping attitudes are affected by various needs including practical, financial,
psychological and physical benefits of online grocery shopping, which means consumers are worried about
the perceived value of negative consequences when purchasing grocery products online (Prasad & Raghu,
2018). Acceptance of online grocery stores positively affects the experience of emerging technology from
the viewpoint of all consumer generations (Bauerova, 2019).
4. Future Research Agenda
Developing a profitable and sustainable online grocery retailing has become a top priority for many
online grocery companies in today's highly competitive Indian grocery retailing, while online grocery
shopping varies considerably from general online shopping due to the perishability and variability of the
products.
The results of this study have contributed to the literature by being the distinctive one that offers a
comprehensive framework to determine the value and impact of online grocery shopping. The review
presented focus a broad perspective like online presence of retailing and factors that impact this business
format but use of artificial intelligent, online and in-store price parity, automation innovation could be, in our
opinion a future path or research. Furthermore, a lesser amount of articles were analysed. If someone would
like to continue this work, they should search for new related words, like comparison on online and offline
grocery. Thus, we believe a more significant number of studies will arise.
5. Conclusion:
Huge growth in internet penetration redefines online retail in emerging markets in general and India in
particular. Given the absence of academic literature in the public domain, this study provides a platform for
future studies in this area. This paper is a systematic attempt to uncover the underlying beliefs of online
grocery retailers in terms of factors that influences perception and attitude of consumers.
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