Covid accelerated the growth of online retail and a series of large investments and takeovers will speed up these developments even more.
Size of the opportunity
The European market for groceries is worth €1.644 billion, with online groceries worth €52.1 billion. The average market share of online grocery is 3.2%. In the Netherlands, the market share of online groceries is expected to grow from 5.1% in 2021 to 9.6% in 2026, in the U.K from 10.5% in 2021 to 11.8% in 2026 and in France from 5.2 % in 2021 to 7.9% in 2026. Germany, Italy and Spain are less online oriented.
At the moment the market is very fragmented with many online players fighting for space in the market.
Groceries delivered in 10 minutes
On the quick commerce front, there are now 10+ companies across Europe with more-or-less the same business model. Pure Quick commerce players such as Getir, Gorillas, Flink and Zapp, who have received large investments to expand their presence, seem to have a chance of winning the fight. Aggregators such as Just Eat or Uber Eats can easily add dark stores to their current operation enabling them to compete in this arena.
Amazon’s delivery service for fresh groceries is also on the rise in Europe. The e-commerce giant delivers in a number of cities in the UK, France and Germany while in Spain and Italy they have started delivering to homes in Madrid and Milan.
Local market to your home
The French La Belle Vie or the Dutch Crisp are examples of online service who bring anything you would find in a local outdoor food market to your home. These services are also expanding their offering and find partnerships to grow. The German food box giant Hello Fresh, who tripled their customer base over the past two years, opened a grocery store in their app and delivers extra groceries additional with their meal boxes.
The retail experience
When online grocery shopping becomes more common, the traditional retailers will need to win the customers with all the advantages a physical shop has. Retailers need to offer an experience to a customer to retain them. The stores can serve as a meeting point where food and drink can be bought and consumed. A place where you can get advice from experts and where you can be inspired by products.
The retail landscape is becoming more diverse. The consumer needs of each of the shopping platforms varies. However, with the rise of online commerce, buyers should consider logistics, added costs due to delivery drivers and quality of products reaching their end consumer.
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 IGD, March 2022