India’s grocery market is projected to reach $992 billion by FY30, driven by rising consumption and expanding digital retail adoption
New Delhi
India’s grocery market is expected to grow from $658 billion to nearly $992 billion by FY30, registering a compound annual growth rate (CAGR) of more than 8 per cent, according to a Redseer report released on Friday.
The report highlighted that over 150 million Bharat households are projected to account for more than $1 trillion in annual consumption by FY30, with groceries remaining their largest spending category.
Despite the rapid rise of online shopping, around 91 per cent of grocery purchases continue to take place through physical stores, leaving significant room for digital expansion. E-commerce currently accounts for only about 3 per cent of India’s grocery market, a figure expected to increase to around 7 per cent by 2030.
Redseer noted that the next phase of growth will depend on strategies tailored to Tier-2 and Tier-3 cities rather than simply replicating metro-focused business models. Companies that adapt product portfolios, pricing and distribution to local consumer needs are likely to gain a competitive edge.
The report found that buyers increasingly prefer branded, packaged and healthier products offered in regional assortments, smaller pack sizes and affordable price points.
It also highlighted the emergence of a value grocery model built around regional product selection, private labels and low-cost fulfilment. A leading value grocery player currently offers around 278 regional and private-label brands, with nearly 58 per cent of its stock-keeping units (SKUs) comprising regional or private-label products, compared with 18–20 per cent on legacy e-commerce platforms.
According to the report, this approach could help bring India’s next 100 million online shoppers into digital commerce. It added that lower-middle-income households across Tier-2, Tier-3 and semi-urban regions are expected to drive nearly $1 trillion in annual consumption by 2030, supported by steady spending growth of around 4–5 per cent each year.
