India’s next online grocery goldmine lies beyond the traditional routes

For years, India’s grocery race has felt like a stopwatch competition: who can get a packet of milk to your door before you even finish scrolling through your phone.

Speed has been the headline act, especially in metro cities where quick delivery has turned quick commerce into a full-blown sprint. The faster the drop, the sharper the edge.

But step outside the big cities, and a different grocery story is quietly taking shape.


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According to a report by Redseer Strategy Consultants, the country’s next phase of e-commerce growth is unlikely to be driven by consumers chasing faster deliveries.

Instead, it could come from millions of value-conscious shoppers across Tier-II, Tier-III and smaller towns who care far more about affordability, assortment and familiar local brands than whether their groceries arrive in a few minutes.

The report argues that India’s online retail market is increasingly evolving into two distinct ecosystems.

On one side are affluent metro consumers, where quick commerce has reshaped expectations around instant fulfilment.

On the other are Bharat households, where grocery purchases remain overwhelmingly dependent on neighbourhood kiranas and where consumers continue to optimise every shopping trip around price and value rather than speed.

For e-commerce companies searching for the next growth engine beyond the metros, that distinction could become increasingly important.

The next online grocery opportunity is its existing online buyers

The report estimates that Bharat households consumed roughly $625-675 billion worth of goods and services annually in 2025, a figure expected to cross $1 trillion by FY30, driven by rising incomes, household formation and a steady shift towards packaged food.

While their share of India’s overall consumption remains below one-third because incomes are lower than those of metro households, the segment is expanding rapidly as the number of Bharat households rises.

About 31% of Indian households are currently classified as Bharat households, which broadly refers to non-metro, rural and smaller-town, value-conscious consumers. By 2030, that share is expected to rise to around 40%.

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Yet despite this growing wallet, grocery shopping, the single biggest line item in that consumption basket, remains stubbornly offline.

India’s grocery market is projected to grow from $658 billion in 2025 to around $992 billion by 2030. Kiranas are expected to account for about 91% of grocery sales currently, with their share still estimated at around 86% by 2030. That highlights how little grocery spending has shifted online compared with other retail categories.

However, contrary to the perception that value grocery is primarily about bringing first-time internet users into e-commerce, Kushal Bhatnagar, Partner at Redseer Strategy Consultants, told ET Online that the opportunity lies elsewhere.

"To start with, value grocery would not bring new shoppers onboard, but sell groceries online to the existing base of 250 Mn+ value commerce shoppers, who currently transact across lifestyle categories,” he said.

“These consumers typically belong to the mid/aspirational income segment and have significant concentration in the non-metro markets. A large portion of their grocery spends would be happening offline, typically through kirana stores, leaving room for online penetration."

In other words, the next leg of online grocery growth may come less from adding new internet users and more from shifting the habits of people who already shop online for everything except groceries.

A tale of two Indias

Redseer says online retail is increasingly becoming what it describes as a "tale of two Indias", with metros and Bharat following very different consumption patterns.

The divergence is already visible in growth numbers.

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According to Bhatnagar, "Last financial year, quick-commerce, with 75% metro contribution, expanded at 120%+ YoY, while value commerce (largely lifestyle focused), with 85%+ tier 2+ contribution, grew at 40% YoY. Both models are targeting entirely different demand segments, with unique propositions (10-min delivery for everyday essentials vs multi-day delivery for low ASP [average selling price] lifestyle products)."

The two may overlap in categories such as FMCG and household goods, but the real fault line is speed versus affordability, rather than what is being sold.

Where quick commerce serves affluent households willing to pay for convenience, value grocery targets aspirational, price-conscious shoppers in Tier-2 and smaller markets, where savings matter more than delivery speed.

Anand Ramanathan, Partner and Consumer Industry Leader at Deloitte India, said the split reflects two structurally different demand models.

"The report (The $250 Billion Commerce Frontier by deloitte) clearly shows that metro-driven quick commerce has reshaped expectations around instant gratification, with delivery timelines compressing to minutes and consumers increasingly willing to pay a premium for speed and convenience. This is reinforced by high adoption of quick commerce in metros, where dense demand, higher order frequency, and willingness to pay for faster delivery have driven nearly 80% of quick commerce GMV.”

"In contrast, Bharat consumers demonstrate a stronger preference for value over speed. The report explicitly highlights that 44% of Tier-2 consumers prioritise savings over speed compared to only 27% in Tier-1 cities, alongside continued reliance on kiranas offering discounts and informal credit."

Ramanathan said the opportunity should be viewed as market expansion rather than substitution, with quick commerce continuing to dominate convenience-led purchases in metros while value grocery addresses an underserved, price-sensitive segment beyond the largest cities.

"The divergence is structural, not temporary, suggesting two parallel growth engines rather than one cannibalising the other."

Why quick commerce may not simply replicate its metro playbook

Quick-commerce companies are rapidly expanding into Tier-II and Tier-III cities, but Redseer believes that does not necessarily mean the metro model will succeed everywhere.

The economics, it argues, are fundamentally different.

Ultra-fast delivery depends on dense dark-store networks, standing rider fleets, high order density and relatively larger basket values. Smaller towns typically have lower order density, more dispersed consumers, smaller shopping baskets and significantly greater price sensitivity.

Despite these challenges, large e-commerce players are continuing to push quick-delivery models beyond the metros, betting that a wider network and expanding assortment can unlock demand in smaller cities.

Amazon India, for instance, is expanding Amazon Now, its quick-delivery service, beyond its initial metro focus. The company’s India spokesperson told ET Online that “Amazon Now is already available to more than 50 million customers across over 15 metro and non-metro cities, including Bengaluru, Delhi-NCR, Mumbai, Pune, Jaipur, Lucknow and Kochi. It plans to expand the service to over 300 cities and scale its micro-fulfilment centre network to more than 1,000 locations.”

The company is also broadening the proposition beyond groceries. Amazon said it plans to launch over 100 Urban Fulfilment Centres (UFCs), which will enable delivery of categories including apparel, electronics, home and kitchen products, baby products and more within minutes.

Amazon said Prime members triple their shopping frequency once they use Amazon Now, indicating higher engagement among existing customers.

Amazon said it will invest ₹2,800 crore in 2026 to expand its operations network, improve infrastructure, enhance delivery speed and reliability, and support delivery associate wellbeing. The company said tens of thousands of products are now delivered within minutes or a few hours, while over one million items are delivered same-day and over four million items are delivered next-day.

According to the Redseer report, value-grocery platforms can keep fulfilment costs to around ₹50-55 per order through community-partner-led delivery networks, roughly half the delivery cost of quick-commerce models.

Bhatnagar believes both the economics and consumer demand favour a different approach outside metros.

"It comes down to economics and need-state. Quick commerce's cost structure — dense dark stores, standing rider fleets, sub-10-minute promises — only works where orders are packed tightly together and basket values are high. Bharat is the opposite: baskets are smaller, less frequent, spread further apart and far more price-sensitive, so the economics break down in smaller towns."

"Value commerce runs a community-partner-led, slotted last mile at roughly ₹50 an order, less than half quick commerce's delivery cost, which is the level at which small baskets actually stay viable. And the Bharat consumer isn't asking for speed; they're asking for selection and value. Both the unit economics and the demand point the same way."

Ramanathan similarly argued that while quick-commerce players will continue expanding into smaller cities, their operating model is likely to evolve.

"Quick commerce faces structural challenges in smaller towns, including lower order density, infrastructure constraints, higher delivery costs, and spread-out demand patterns. These limit the economic viability of ultra-fast delivery models, making it harder to replicate metro success in Bharat markets. While quick commerce will expand into these markets, its model will likely evolve, effectively converging toward a value-led approach rather than replacing it."

More than just a logistics battle

Redseer’s report suggests the opportunity may be less about logistics and more about assortment and affordability.

Its recommendations for companies targeting Bharat focus less on delivering faster and more on stocking deeper regional assortments, expanding affordable private labels, offering smaller pack sizes, lowering fulfilment costs and tailoring product mixes to local preferences rather than simply extending metro catalogues into smaller towns.

Bhatnagar does not see the future as a winner-takes-all contest between quick commerce and value grocery.

"Both scale. Firstly, India's USD 1 Trillion grocery market (by 2030) has space for multiple models to co-exist. Secondly, quick-commerce is serving an entirely different consumer from value grocery. QC shopper typically belongs to the high-income / affluent segment, typically brand conscious and willing to pay a premium for superior quality offerings. Value grocery shopper is aspirational but brand agnostic, and also targets in small baskets."

As India’s grocery market marches towards the $1 trillion mark, the report suggests the next big opportunity may not lie in delivering groceries faster, but in convincing millions of existing online shoppers across Bharat that buying groceries online can save them money, not just time.