Market share of grocery stores is estimated to be 88.9 percent by 2028, revealed in the report

New Delhi. There is always a lot of turmoil in the e-commerce market, where it is difficult to assess what will happen to grocery stores in the future. According to a recent report by Datum, the market share of traditional kirana stores is continuously declining in India, as quick commerce platforms are gaining market share. The report revealed that the market share of kirana stores increased from 95 percent in 2018 It has fallen to 92.6 percent in 2023 and is expected to further fall to 88.9 percent by 2028. This shift reflects consumers' growing preference for online grocery shopping.

Know what the report says

The report predicts 74 percent growth in the quick commerce segment in 2024, making it the fastest growing retail channel during the period 2023-28. With a compound annual growth rate (CAGR) of 48 per cent, Quick Commerce is set to revolutionize the grocery market. “Quick Commerce is expected to accelerate the channel shift from kirana to online grocery,” it said.

The impact on grocery stores has been significant, with 46 percent of Quick Commerce users reporting reduced purchases from grocery stores. More than 82 percent of shoppers have shifted at least 25 percent of their purchases from grocery stores to Quick Commerce platforms. The data also mentioned that the survey shows that 5 percent of the respondents have stopped shopping from grocery stores altogether.

The market changed with the arrival of Quick Commerce

The report also states that “before the advent of Quick Commerce, grocery stores were the primary destination for unplanned grocery shopping due to their convenient locations and flexible operating hours”. It also mentioned that an estimated USD 1.28 billion of grocery sales are expected to shift to the Quick Commerce platform in 2024, accounting for 21 percent of the latter's total sales. According to the report, the reason for the rise of quick commerce platforms is that quick commerce offsets the high channel costs of traditional retail by eliminating middlemen and replacing them with streamlined delivery systems.

As long as delivery costs remain lower than the savings from channel consolidation, these platforms can offer competitive prices, further reducing the dominance of kirana stores. This shift reflects the challenges grocery stores face in adapting to changes in consumer behavior driven by the convenience, speed and cost-effectiveness offered by Quick Commerce.