The global online grocery market is projected to register a CAGR of 12.61% during the review period. The growth of the market can be attributed to the surge in promotional activities and discount offers by major players along with increasing per capita disposable income. Market players are expected to witness profitable growth opportunities in the global market due to the expansion into untapped markets.
The key players operating in the US wrap market include Amazon.com, Inc. (US), Walmart Inc. (US), The Kroger Co. (US), Albertsons Companies, Inc. (US), Fresh Direct, LLC. (US), ALDI (Germany), ASDA (UK), Auchan SA (France), Royal Ahold Delhaize NV (Netherlands), and TESCO PLC (UK). The market comprises tier-1, tier-2, and local players. The tier-1 and tier-2 players have a global reach along with diverse product portfolios. Companies such as Amazon.com, Inc., Walmart Inc., The Kroger Co., Albertsons Companies, Inc. and Fresh Direct, LLC. dominate the global market due to brand reputation, product differentiation, financial stability, and diversified regional presence.
The players are focused on investing in research and development and adopting strategic growth initiatives such as product launches, expansions, and partnership to strengthen their market position and capture a large customer base.
Threat Of New Entrants
The high internet penetration and the increasing adoption rates of online grocery delivery services are significant drivers for new entrants in the global market. To survive in the competitive market, the existing players are focusing on strategic developments, appropriate storage methods, and attractive delivery channels and approaches to keep a check on their customers and outperform their competitors.
Thus, the threat of new entrants in the global online grocery market is expected to be high during the forecast period.
Bargaining Power Of Suppliers
The suppliers include manufacturers, distributors and wholesalers, importers, and independent suppliers operating via online retails. Several raw material suppliers are operating in the global market, indicating that the manufacturers have the liberty to shift between suppliers. The suppliers are vying for an increased share in the global online grocery market as e-tailers consider the switching costs to be low and give more importance to margins.
Uniqueness of Suppliers: The bargaining power of suppliers is a crucial factor in the online grocery industry and determines the strength of the company. The suppliers are unique in terms of sourcing, supplier relationship, and product functionality, creating product differentiation, discounts, and delivery offers.
Therefore, the bargaining power of suppliers in the global online grocery market is expected to be moderate during the forecast period.
Threat Of Substitutes
The global online grocery market faces intense internal competition. The awareness and availability of online platforms are growing owing to the robust marketing strategies employed by the major players. By analyzing these factors, it is identified that there are chances of product substitution at an internal level, due to the availability of multiple options in the global market.
Consumers are willing to pay a premium for quality, convenience, and variety. However, the poor infrastructure and lack of cold storage in the supply chain is a significant deterrent in the market as the freshness of the product is of importance. Poor quality and long delivery times can deter consumers from buying online and result in them shifting to conventional stores.
Hence, the threat of substitutes in the global online grocery market is expected to be high during the forecast period.
Bargaining Power Of Buyers
The presence of several players in the global online grocery market has attracted a wide consumer base. Most of the consumers are well-informed about the various products available in the market. There is an increasing number of players foraying into the market. Additionally, the suppliers and distributors with established distribution networks are potential players that could enter the market. Buyers can easily switch to an e-tailer that offers low prices, on-time delivery, secure payment options, and high-quality products.
Thus, the bargaining power of buyers is expected to be high in the global online grocery market during the forecast period.
Intensity Of Rivalry
The global online grocery market is marked by high competition. Many established players are targeting competitors in terms of quality and price, making the industry competitive, which, in turn, reduces profit margins for all existing firms. The manufacturers are actively promoting their products through advertisements on television, the Internet, and other channels. Market players compete for higher market shares, which creates price wars, advertising battles, and higher quality of customer services. The players in this industry have substantial marketing expenditures in the form of print, media, and discount sales. The concentration ratio, which determines the maximum market share owned by major firms, is used to measure rivalry.
Therefore, the intensity of competitive rivalry in the global online grocery market is expected to be high during the forecast period.
