Online Grocery Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in the Online Grocery Industry

The emergence of Environmental, Social and governance in recent decades has led investors for a responsible investment. The industry has been gaining attention due to fast paced life, convenience, hygiene, and smart shopping options.

The online grocery industry has been highly utilized by consumers in Tier-I states of India, like Bengaluru, Chennai, Mumbai, and Delhi.  During pandemic, online groceries showcased an upsurge due to social distancing as well as preference of safe and hygiene products. Main success of this segment falls with strong and sound value chain operations ensuring continuous flow without compromising customer satisfaction. Moreover, this segment has accessibility to a variety of groceries which are not available in the nearby vicinity of consumers. Customer data privacy has been one of primary concerns among consumers along with provision safe and secure UPI or money transfer. There has been no compromise product quality front, as these companies have policies supporting the same. Most of the companies are in favor of circular or sustainable packaging reducing plastic waste with a specific target. All these help this market achieve the United Nations Sustainable Development Goals (UN SDGs).

ESG Trends

Considering online grocery sector, both Environmental and Social aspect have been creating an impact for this sector. Starting with, accessibility (SDG 9- Industry, Innovation, and Infrastructure/SDG 10 – reduced inequalities) has been one of the key factors resulting the upsurge of this segment, with a strong supply chain connection and a booming e commerce market have been the main contribution. Ensuring the product quality as well as food safety (SDG 12 - Responsible Consumption and Production) with food specific certification like FSSAI, FSSC 22000 or Plant based Certification (PBS) etc. and responsible product labeling ensuring sufficient constituents which varies with consumer preference. Customer data privacy which contributes to UN SDG 16 - Peace Justice and Strong Institutions has been one of the main concerns among consumers, there has not been a well formulated legal framework other than IT Act (2000), within which Clause 43A and 72 A for data breach and legal procedures. Circular or sustainable packaging has been developing in this segment, for example one among the company had introduced a new curbside- recyclable packaging for insulating chilled items, this had eliminated 1500 tons of natural cotton fiber and 7500 tons of non-recyclable mixed plastic which were used initially.

ESG Challenges

This segment faces various challenges, firstly Online grocery promises product quality but in terms of affordability, online purchases are comparatively costlier compared to normal grocery purchases. In the current scenario we are witnessing the verge of Pandemic, people are having lesser concern for social distancing, hence there has been a slight downfall in the market. In India, Tier-II and Tier III states prefer COD over UPI, this has led to a lot of discrepancies and disputes among consumer and provider end. Moreover, consumers face Security and confidentiality issues among these states. One of the most important aspects is that there is no fixed legal framework or regulation to the market other than the IT act 2000, there has been a draft ecommerce policy which has to be put forward globally by the World Trade Organization which considers the online grocery segment. 

Growth of the Online Grocery Market

Indian online grocery market size has been valued at USD 2.9 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 37.1% from 2021 to 2028. The market has been shifting on account of the changing lifestyle of the consumers and urbanization. Packaging has been one of the concerns, going forward more sustainable or a circular packaging model is to be implemented fully fledged in this segment.

Key Companies in this theme

    • Amazon India Pvt. Ltd.

    • Godrej Nature's Basket Ltd.

    • Grofers India Pvt. Ltd.

    • Paytm E-Commerce Pvt. Ltd. (Paytm Mall)

    • Reliance Retail Ltd. (Reliance Fresh)

    • Spencer's Retail

    • Supermarket Grocery Supplies Pvt. Ltd. (BigBasket)

    • UrDoorstep eRetail Pvt. Ltd.

Scope of the Online Grocery Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process.

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Online Grocery Industry ESG Thematic Report

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the Online Grocery space, globally

    • Key insights into environmental developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the online grocery industry

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment into the sector