COVID-19 has provided an opportunity for hyperlocal food-delivery service providers to diversify their operations to boost revenues and make their business more resilient to the changing economic cycles and consumer behavior. In line with this, Asian last mile delivery service providers such as Singapore-based Grab Holdings and Indian food aggregator Swiggy are stepping up their focus on the e-groceries space, says GlobalData, a leading data and analytics company.

Bobby Verghese, Consumer Analyst at GlobalData, comments: “With the prolonged stay at home, consumers shopped online for daily essentials to avoid frequent trips to brick-and-mortar retail stores. As a result, they have become accustomed to the convenience and safety of online grocery shopping. Even after the pandemic restrictions were eased, the online grocery shopping trend has continued to gain momentum.”

This reflects in GlobalData’s Q3 2021 consumer survey*, where 31% of Asia-Pacific (APAC) respondents affirmed that they were shopping online for groceries more often, and 14% said that they have begun to do this during the third quarter of 2021.

With demand for ride-hailing services falling in 2020 due to the pandemic, Grab Holdings turned its focus to its grocery delivery service, GrabMart. In 2020, Grab launched its on-demand grocery delivery services in eight South East Asian markets it operates in.

Similarly, with the food aggregator business cooling off during to the lockdown, Zomato and Swiggy turned to online grocery deliveries to boost revenues and employee productivity in India. Zomato invested US$100m into grocery delivery startup, Grofers in 2020. In July 2021, Swiggy completed a US$1.25bn funding round to develop its non-food hyperlocal delivery verticals, Supr Daily, Instamart, and Genie.

Verghese concludes: “The online grocery delivery market in Asia is expanding rapidly, attracting consumers with competitive prices, faster deliveries, and improved customer experience. The growth of e-groceries can accelerate the digitization of the burgeoning unorganized retail sector in Asia. With competition heating up rapidly in this space, market consolidation is anticipated in the immediate future.”

*GlobalData Q3 2021 Consumer Survey – the Asia-Pacific (September 2021) with 6,399 respondents