RIL To Dominate Online Grocery Sales As E-Commerce Expected To Grow 27%, Says Goldman Sachs

Growth in e-commerce is likely to come from better penetration into categories such as grocery/FMCG, improving payment ecosystem and ease of shopping through WhatsApp etc.

New Delhi, July 22: Those who were averse to online shopping in the pre-covid times have taken the online route to get essential supplies and the e-commerce business is only expected to grow at a compound annual growth rate (CAGR) of 27 per cent to touch $99 billion by 2024 in India, according to Goldman Sachs. Also Read: IPO Market 2020 Remains Muted, Know Why Companies Are Not Tapping The Market Reliance Industries would capture half of the online grocery sales through Facebook, said the global financial services company in its new report titled 'Global Internet: e-commerce's steepening curve'. "We believe RIL's partnership with Facebook could result in the company becoming a market leader in the online grocery space, with more than 50 per cent share by 2024," it said. It also said that a large category for two or more players to co-exist over time. In the wake of Covid-19, there has been a doubling of penetration of e-commerce globally with categories such as consumer packaged goods driving as much as three years of penetration growth in three months. "We forecast India e-commerce will reach $99 billion by 2024, growing at a 27 per cent CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth in our view," it said. Online penetration of retail is expected to reach 10.7 per cent by 2024, versus 4.7 per cent in 2019. "The biggest near term theme in India Internet, in our view, is the foray of Reliance Industries (India's largest market-cap company with presence across sectors such as energy, telecom, and retail) into e-commerce, and the company's tie-up with WhatsApp for online grocery," it said. Growth in e-commerce is likely to come from better penetration into categories such as grocery/FMCG, improving payment ecosystem and ease of shopping through WhatsApp etc. The largest social media platform Facebook has picked up a 9.99 per cent stake in Jio Platforms, the subsidiary of RIL that houses the country's youngest but biggest telecom company as well as an array of apps. RIL's e-commerce venture, JioMart plans to use Facebook's WhatsApp to connect local grocery stores with customers. The online grocery market in India has been growing at over 50 per cent year-on-year in the last few years, but with the outbreak of Covid-19 resulting in shift to online, and the recent entry of RIL, the growth will accelerate to 81 per cent CAGR during 2019-24, it said. Goldman Sachs said Bigbasket and Grofers accounted for more than 80 per cent of the market in 2019 in online grocery.