By Prakash Gurumoorthy, General Manager – EMEA & APAC, VTEX India
The world of grocery shopping has undergone a significant transformation in recent years, driven by changing consumer preferences, rapid digital adoption, and heightened expectations for convenience and selection. As grocers navigate this new landscape, reassessing their fulfilment strategies and customer engagement approaches has become critical for long-term success. The stakes are high, and the winners will be those who can effectively integrate offline stores and online platforms while delivering a seamless, personalised experience to their customers.
The Quick Commerce Trend in India
The quick commerce (q-commerce) trend has been rapidly gaining momentum in India, driven by consumer demand for ultra-fast deliveries. With platforms like Blinkit, Dunzo, and Zepto leading the charge, consumers are now accustomed to receiving groceries and everyday essentials within 15–30 minutes of placing an order. This surge in demand is not just a passing fad, but a major shift in how consumers approach shopping. The quick commerce market in India is currently valued at USD 3.34 billion in 2024 and is projected to reach USD 9.95 billion by 2029.
In 2025, the quick commerce sector is expected to grow by 75% year-over-year, expanding beyond groceries into new categories and reaching tier-2 and smaller cities, according to Bernstein Report. This growth is driven by the model’s advantages, including proximity, competitive pricing, and a wide selection of products.
For grocers, quick commerce presents both an opportunity and a challenge. It requires robust backend infrastructure, real-time inventory management, and a reliable delivery network. Companies are now investing heavily in technology, partnering with third-party logistics services, and optimizing micro-warehouses to meet these expectations. The key to success will lie in offering both speed and reliability, ensuring that consumers’ expectations for freshness, quality, and service are met consistently.
However, despite the growth of online grocery shopping, various factors still discourage some customers from fully embracing this channel. According to another report, key concerns include the inability to personally select fresh produce (54%), high shipping or delivery fees (54%), higher prices compared to in-store (46%), worries about product quality upon arrival (42%), and inconvenient delivery times (24%). To overcome these challenges, grocers must prioritise strategies that enhance convenience, offer competitive pricing, and ensure optimal product quality. This may involve investing in advanced logistics systems, partnering with reliable delivery services, and implementing stringent quality control measures.
Personalisation and Targeted Promotions
Engaging Price-Conscious Consumers One effective approach to engage price-conscious consumers and drive profitability is through personalised ads and promotions. Retailers are leveraging AI and machine learning to meet these expectations, enhancing customer satisfaction and fostering stronger loyalty.
By leveraging advanced analytics, grocers can tailor their digital advertising based on individual customer purchasing patterns. Moreover, offering online promotions that differ from in-store deals creates unique revenue streams and incentivises customers to explore the digital channel further. Imagine a world where a grocer’s most valuable customers eagerly anticipate their weekly emails featuring personalised product recommendations and exclusive online deals. They’ll be filling their virtual baskets faster than ever, eager to take advantage of the special offers awaiting them online.
However, unlocking these benefits demands a ground-up redesign of the grocery operating model. Outdated systems and manual workflows are ill-suited for the digital age’s intricacies. It’s like trying to navigate a sleek sports car with a horse-and-buggy instruction manual – the grocer might eventually reach their destination, but it won’t be a smooth or efficient ride. Forward-thinking grocers are embracing cloud-based solutions, automation, and AI-powered tools to streamline their operations and deliver a more agile, responsive service to their customers.
Boosting Profitability through Marketplace Integration and Technology Investments
Another strategic move for grocers is to expand their product assortment by integrating third-party sellers into their online marketplace. This approach not only enhances the overall shopping experience for customers but also presents an opportunity for higher profit margins. Third-party products often come with more favourable margins compared to direct inventory, allowing grocers to boost their bottom line while providing a more comprehensive online offering. Additionally, marketplace integration can help grocers quickly adapt to changing consumer demands and offer a wider variety of speciality or niche products.
To thrive in the digital age, grocers must also invest in advanced technologies and optimisation tools. Implementing solutions that enhance picker efficiency, reduce labour costs, and increase order accuracy is crucial for streamlining operations and improving profitability. Additionally, leveraging data analytics to personalise digital ads and optimise promotions based on customer preferences can significantly impact customer engagement and retention. By harnessing the power of technology, grocers can gain a competitive edge and deliver a more tailored, efficient service to their customers.
The Future of Grocery: Digital Growth and Strategic Imperatives
Looking ahead, the importance of digital promotions and advertising in the grocery industry is set to grow exponentially. This growth is driven by a tech-savvy population, smartphone penetration, and an increasing demand for convenience.
In fact, eMarketer projects that the grocery sector will become the largest e-commerce category by 2026. To stay competitive in this evolving landscape, retailers must prioritise investments in marketplace integration, robust order management systems, and cloud-based infrastructure. They must also cultivate a culture of innovation, experimentation, and continuous improvement, always staying attuned to the changing needs and preferences of their customers.
H Mart, a leading Asian supermarket chain, in a partnership, featuring both Uber and VTEX, marks a pivotal development in it’s strategy to enhance its ecommerce operations and customer service. H Mart’s collaboration with Uber has enabled on-demand and scheduled deliveries across 78 stores in North America, offering convenience with same-day delivery and direct fulfillment via Uber Direct. Alongside this, the integration of a state-of-the-art digital solution has streamlined in-store processes and enabled real-time inventory management, ensuring seamless customer experiences both online and in-store. By offering tailored promotions, efficient order fulfillment, and expanding digital services, H Mart is creating a new era in grocery shopping, combining the best of both online convenience and in-store service.
The road ahead may be challenging, but for those with the foresight and flexibility to navigate it, the potential rewards – market share growth, boosted profitability, and long-term customer loyalty – are immense. The choice lies before the grocers: will they cling to the familiar comforts of the past, or will they boldly embrace the exciting possibilities of the future? The shopping trolleys are in their court, and the time to act is now. By embracing digital transformation and putting the customer at the heart of their strategies, grocers can not only survive but thrive in the new era of grocery retail.