RedSeer said the e-grocery market in the country was estimated to be about USD 3.3 billion in 2020, of which 45 per cent was the ''value-first'' e-grocery segment.
GMV is a term used in online retailing to indicate the gross merchandise value of the products sold through the marketplace over a certain period.
The report titled ''Indian eGrocery- A promising opportunity led by value-first users'' described ''value-first'' segment as buyers for whom affordability is key and buying low-priced grocery is of utmost importance.
"The ''value-first'' e-grocery segment is projected to grow at 53 per cent CAGR over the next 5 years – faster than the e-grocery market itself, which is forecasted to grow at 48 per cent CAGR," the report said.
It said the e-grocery segment presents a massive opportunity as digital platforms penetrate less than 1 per cent of the grocery space in India (despite significant boost that the sector received last year due to COVID).
As per RedSeer''s estimates, more than 50 per cent of the about USD 570 billion grocery retail space in India is addressable by e-grocery platforms.
Of this, value-first households account for 61 per cent share with metro and tier I markets covering more than 40 per cent of this value-first opportunity.
The report said value-first households have unique grocery purchase priorities and behaviour – they stock-up most of their groceries, are focused on the basic categories like staples and fresh, and are quite content with a simple and hygienic assortment as long as the products are affordable.
The report noted that as a result of the simple and basic requirements of these value-first households, the potential unit economics of serving them online would be quite favourable.
"Accounting for almost two-thirds of the 130 million e-grocery addressable households, value-first households account for a large opportunity in the grocery space, but are quite different in the way they go about purchasing groceries," RedSeer Engagement Manager Kushal Bhatnagar said.
As a result of COVID, hygiene has become a second consideration driver, after affordability, for these households and that such differentiated purchase behaviour would require eGrocery platforms to serve this opportunity through specifically tailored offerings, he added.
Bhatnagar said e-commerce giants Amazon and Flipkart are also looking at the e-grocery space closely, led by the huge opportunity it has to offer.
Up till now, these platforms have been focused on serving the top-up needs for almost all types of households, he noted. PTI SR BAL