Online Grocery Space Losing Shine As More People Turn To Offline Fruit, Vegetable Purchases

Quick commerce platforms-driven online grocery market, which has seen a boom in India catapulted by COVID-induced lockdown since 2020, has now started tapering off mainly because of the rising hesitancy among fruits and vegetables consumers triggered by shrinking discounts and average quality products, according to the findings of a survey.

Of the 12,207 people surveyed, only 7% favour purchase of fruits and vegetables online, while 66% prefer local or weekly markets, according to the survey conducted by community media platform LocalCircles.

The survey was conducted across 297 Indian districts. Of the 24,000 responses from households, 61% were male and 39% female. 

At least 45% prefer buying from local markets, 21% from weekly markets, 3% from wholesale markets, 19% from local vendors and 5% from organised retail stores. 

Established platforms like Big Basket, Amazon Fresh, and Jio Mart, along with subscription services such as Big Basket Daily and Milk Basket, as well as quick delivery platforms like Swiggy Instamart and Blinkit, dominate the online grocery scene in most metros in the country. 

Despite numerous online options for ordering fresh produce and doorstep delivery, many consumers have reverted to purchasing groceries from local stores and markets in the past 10 months and this trend is expected to persist in the coming months, the findings said.

In the survey of 11,964 respondents, 73% cited “low quality of produce” as a major issue, 56% complained of “high prices,” and 51% indicated problems with “difficult returns/grievance redressal processes.” Additionally, 37% faced issues with “inconsistent stocking/availability,” and 7% experienced “long delivery times.” While 12% reported no issues, the general sentiment is shifting, with consumers increasingly opting for local markets due to reduced discounts and improved COVID conditions.

Sachin Taparia, founder of LocalCircles, highlighted the historical acceptance of average quality due to competitive prices but noted a current trend toward local market purchases, driven by dissatisfaction with return processes and impractical refund requests for small quantities of fresh produce.

LocalCircles also said that it conducted a ratings exercise in Noida from July 1, 2023, to November 20, 2023, assessing various online platforms delivering fruits and vegetables. Its key highlights included Zepto and Blinkit being the fastest, taking 10-30 minutes for delivery. 

Amazon Fresh and Jio Mart received the highest value/price rating of 3.5/5. Amazon Fresh and Milkbasket led in service ratings with a score of 3.5/5. Milkbasket topped the overall consumer rating at 14 out of 20, followed by Bigbasket at 13.5, Amazon Fresh at 13, Bigbasket Now at 12.5, and JioMart at 12. Other platforms surveyed scored 11.5.

After the funding boom over the last few years, the quick commerce space in the country has been seeing some strain off late. Recently, Kabeer Biswas-led Dunzo faced various challenges, including financial issues, layoffs, delivery partner strikes, and key resignations, leading to a retreat from quick commerce. 

Reliance Retail’s JioMart reportedly shut the operations of JioMart Express, the quick commerce delivery arm of JioMart, which was launched in March last year.

Meanwhile, Zomato, which owns Blinkit, announced its achievement of profitability in the first quarter of the financial year 2023-24 (FY24), reporting a consolidated profit after tax (PAT) of INR 2 Cr. 

In August, Zepto secured $200 Mn in a Series E funding round at a $1.4 Bn valuation, becoming the sole unicorn of 2023. The Mumbai-based startup later added $31.25 Mn to its funding in the same series from Goodwater Capital and Nexus Venture Partners, maintaining its intention to go public by 2025.