South America Online Grocery Market Outlook, 2028

Online grocery refers to various web-based applications that are used for purchasing food and necessary household products over the internet. They enable customers to place their orders through e-commerce websites or mobile applications and provide numerous benefits, such as convenience and ease of shopping, and anytime access to a wide variety of products. Along with this, they allow users to place pre-paid orders and schedule the time and intervals of the deliveries as per their requirements. Some of the common groceries available online include bakery, canned goods, dairy, frozen foods, meat, fresh fruits and vegetables, homecare cleaners, and personal care. Significant growth in the e-commerce industry is driving the market across South America. Moreover, the widespread utilization of internet services, the proliferation of mobile devices, and the availability of simple virtual payment methods that make online platforms easier and more convenient are contributing to the demand for online groceries. Aside from that, continual technical developments and the emergence of voice assistants and delivery robots are driving growth. Due to shifting lifestyle preferences and the hectic working schedule of working professionals, the demand for online grocery shopping has rapidly increased across the region. Other factors, including rapid digitization, inflating disposable income levels of the masses, and the development of aggressive marketing strategies and celebrity endorsements, are influencing the market growth.

According to the research report, “South America Online Groceries Market Outlook, 2028” the market is anticipated to add USD 7 Billion from 2023 to 2028. At present, the leading players in South America are focusing on increasing investments to expand their consumer base and boost their product sales. Apart from this, the boosting sales of smartphones, rising internet penetration and the increasing influence of social media platforms are other major factors propelling the market growth. Furthermore, the sudden outbreak of the coronavirus disease (COVID-19) has resulted in the increasing sales of groceries through online distribution channels. This can be attributed to governing authorities imposing lockdowns in order to encourage social distancing tactics, resulting in supply chain interruptions. The increasing use of smart devices and rising internet penetration are propelling the South American online grocery business. Aside from that, several significant firms in South America are actively investing in designing user-friendly interfaces to increase product sales and consumer base. This, together with the growing importance of other social media platforms such as Facebook and Instagram, is accelerating industry expansion. Furthermore, the quick emergence of COVID-19 has moved customer preferences towards online grocery platforms for combating the virus's propagation through human connection in traditional brick-and-mortar establishments. This, in turn, is further expected to catalyse the market over the forecasted period.

Based on the report, the market is segmented into two major countries including Brazil and Argentina. The rise in investments in cloud kitchens and dark kitchens is expected to drive the study market. For example, in South America, investors are looking for dark kitchens. Mimic, a Brazilian business, can attest to this after receiving USD 9 million in a seed round. Canary and Valour Capital Group also contributed to the investment, which was led by Monashees. Individual investors with vast expertise operating their own businesses in Brazil joined them as well. Because of the presence of several companies, the South American online grocery delivery market is moderately competitive. Market participants are pursuing tactics such as product innovation, mergers, and acquisitions in order to diversify their product portfolios, expand their geographic reach, and, most importantly, remain competitive in the market. The grocery market in South America has been shifting from the traditional brick-and-mortar format to the online platform in recent years. The South American market is also pushed by the vast array of food items and cuisines available at the customer's doorstep, allowing them to sample a range of delicacies. These services assist service providers in extracting precise client information in order to improve their experience through the development and implementation of promotional tactics. The online meal delivery market is also affected by how busy people are and how more people live in cities, which make people like to use the service. Mercado Livre is the largest online marketplace in South America and has a significant presence in the online groceries market in Brazil. The online groceries market in Brazil is highly competitive, with major players such as GPA, Carrefour, and Amazon investing heavily in their online grocery platforms.

The supermarket service business was particularly hard hit by the COVID-19 epidemic. To try to contain the spread, many South American countries went under lockdown. Meal delivery became the only method for grocery service companies to stay operational during the pandemic in this scenario. Stricter safety and hygiene requirements, on the other hand, have prompted delivery companies to employ contactless delivery. In Brazil, for example, operators are looking into meal kits and ready meals to expand their offerings. To address the rising demand for pampering and convenience, supermarket chain Pao de Acucar's Cheftime Restaurant prepares meals in the supermarkets' idle kitchens and deli stations. The major factors driving the growth of the market are the growing demand for convenience, the increasing number of working women, and the growing penetration of the internet and mobile phones. The South American online grocery market is highly fragmented with the presence of a large number of players. The key players in the market include Amazon, Walmart, and Mercado Libre. The other players in the market include Jumbo, Cencosud, and Carrefour. The COVID-19 pandemic is expected to have a positive impact on the growth of the online grocery market in South America as the people are opting for online grocery shopping to avoid going to the supermarkets.

Based on the report, the market is segmented into various product types including staples & cooking essentials, snacks & beverages, breakfast & dairy, fresh produce, meat & seafood and others. Among them, staples & cooking essentials are projected to lead the market by 2028. Staples and cooking essentials are generally considered to be among the most essential and in-demand products in the grocery category, regardless of the region. This includes items such as rice, beans, flour, sugar, cooking oil, spices, and other ingredients commonly used in everyday cooking. In the South American market, there has been a growing trend towards online grocery shopping, particularly due to the COVID-19 pandemic, which has led to increased demand for home delivery services. This is because consumers are increasingly turning to online shopping to purchase essential items and staples and cooking essentials are often the most frequently purchased items in the grocery category. Based on the delivery type, home delivery segment is dominating the market in 2022. Home delivery is a popular delivery type for online groceries in South America. Consumers can place their orders online and have them delivered directly to their doorstep, often within a few hours or on the same day. However, click-and-collect is another delivery type that is becoming increasingly popular in South America. With this option, consumers can place their orders online and choose to pick them up at a designated location, such as a store or a locker. Third-party delivery services are also commonly used in the South America online groceries market. With this option, consumers can place their orders online and have them delivered by a third-party delivery provider, such as Rappi or Uber Eats. Subscription-based delivery services are gaining popularity in the South America online groceries market. With this option, consumers can sign up for a regular delivery of groceries, often on a weekly or monthly basis, to ensure that they always have essential items on hand. In-store pickup is another option that some online groceries offer in South America. With this option, consumers can place their orders online and pick them up in-store, often within a few hours.

To achieve the higher market expansion across the South America, “dark stores” are surging all over the emerging cities. These are groceries storage facilities that are not open to the public and that are dedicated only to the fulfilment of grocery deliveries. In 2019 Glovo opened one of the first dark stores in South America. Then PedidosYa took over the operations in South America, launching a new service called “PedidosYa Market” that sleeked to deliver groceries in 10 min. Rappi established dark storefronts at the end of 2021, which enabled them to start their Rappi Turbo service, which allowed them to fulfil orders swiftly. Rappi currently operates over 330 dark stores in over 25 South American cities, with plans to close the year 2022 with 150 dark stores in Brazil and 40 in Peru and Chile. Following that, many Quick Commerce businesses opened dark stores in South American countries, such as Cornershop in Chile with the assistance of grocery chain Cencosud, Jokr in Peru and Brazil (with Ifood), and Daki and Nana delivery in Brazil. PedidosYa had 22 dark stores open in 2021, with a total of 60 planned by 2022.

Recent Developments:

• In February 2023, Diferente, a Brazilian online grocery delivery service, has secured USD 3 million to expand its consumers' access to healthier food. Petrelli worked with Saulo Marti and Paulo Moncores to start Diferente at the beginning of 2022. They wanted to make healthy foods easier to find and cut down on the 30% of bad produce that supermarkets usually throw away.
• In July 2022, Future Farm, a Brazilian plant-based food tech startup, will launch a series of restaurant takeovers in Los Angeles to put more plant-based meat on menus. The brand works with the Italian deli Ggiata, the pizza place Prince Street Pizza, the coffee shop Cofax, which has a baseball theme, and the burger takeout place Golden State to make plant-based food.
• In March 2022, Wendy's, a fast-food restaurant chain, will expand its operations in Mexico. Wendy's anticipates having hundreds of stores in Mexico. In addition to the chain's basic menu, which includes burgers and Frosty desserts, the business is designing a distinct national menu for the country, featuring limited-time deals suited to the Mexican market.
• In April 2022, Justo, the online grocery in Mexico City, is still firing on all cylinders to saturate the South American market. The company claims to be Mexico's first supermarket without a physical presence, allowing customers to buy groceries through its website or app. Jüsto would transport the order to the customer's preferred location.

Major Companies present in the market:

Amazon, Alibaba, Walmart Inc, Rakuten Group Inc., Jumbo , MercadoLibre, Inc., Carrefour, Albertsons Companies, Inc

Considered in this report

• Geography: South America
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report

• South America Online Groceries market with its value and forecast along with its segments
• Country-wise Online Groceries market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Countries covered in the report:

• Brazil
• Argentina
• Colombia

By Product Type

• Staples & Cooking Essentials
• Snacks & Beverages
• Breakfast & Dairy
• Fresh Produce
• Meat & Seafood
• Others

By Delivery Type

• Home delivery
• Click and collect

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; the author has started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the artificial lawn industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.