Starting an Online Grocery Business in 2025: A Complete Guide

Last Updated 25th Feb, 2025

Online grocery shopping is catching up with consumers rapidly. According to the statistics, the global online grocery market value is expected to grow at a CAGR of 15.5% from 2024 to 2032 and is projected to reach USD 2.3 trillion by 2032. 

No doubt, this forecast will get a lot of entrepreneurs interested in the grocery eCommerce market. The purpose of this blog is to help such entrepreneurs gain an in-depth understanding of how to start an online grocery business in 2025. Additionally, know about major players in the grocery industry, things to consider before starting an online grocery delivery business, different business models, revenue channels, key features, development approaches, and more. 

Major Players of the Grocery Industry

The top retailers of the grocery eCommerce industry are not only popular among customers but many aspiring entrepreneurs or business owners study their order to cash process or frameworks before starting their own grocery ordering and delivery business.

Some of the leading online grocery marketplaces are Shipt, Gopuff, FreshDirect, OneCart, Zulzi, Pick n Pay, KIBSONS, GrabMart, Blinkit, beelivery, FarmBox, FarmDrop, Amazon Fresh, Peapod, Instashop, Walmart Grocery Delivery, Safeway, Kroger, Buymie, Good Eggs, Cornershop.

Things to Consider Before Starting an Online Grocery Business

To successfully start and operate an online grocery delivery business, you need to focus on the following factors: 

• Selecting and enhancing (if required) grocery business model 
• Creating a roadmap to transform the business model into an agile, efficient, and a precise operating model
• Determining the target market 
• Segregating the delivery regions
• Competitor analysis
• Grocery website and mobile apps

Out of all these factors, entrepreneurs or business owners often waste so much time and resources in choosing the suitable grocery business model.

To help you out with it, we have explained four major business models in the grocery industry with examples of market players.

Different Online Grocery Business Models with Prominent Examples

1. Instacart: Hyperlocal Grocery Business Model

Instacart is another prominent name in the arena of grocery delivery service providers. Its unique selling point is rapid delivery. Being a hyperlocal grocery delivery platform, Instacart connects customers with personal shoppers and provide door-step grocery order delivery. It works on a 3 tier customer strategy, where buyers purchase grocery orders online via the application of Instacart. 

Business model of Instacart at glance (buying and dispensing)

• Grocery Retail Partners
• Instacart Shoppers

Grocery retail partners: Grocery vendors who have a contract with Instacart to list and sell their grocery items through the platform.

Instacart shoppers: Instacart shoppers shop for groceries as per buyers’ requirements and then deliver it to them.

2. FreshDirect: Inventory Business Model

The main USP of FreshDirect is to deliver fresh groceries to its consumers. By using the FreshDirect app, customers can order groceries with the click of a button. The order is later delivered to the customer’s doorstep by a refrigerated truck. Apart from customers, grocery suppliers, and FreshDirect buyers, are the key partners of FreshDirect.

Business model of FreshDirect at glance (buying, warehousing, dispensing)

• Grocery Suppliers
• FreshDirect Buyers

Grocery suppliers: By partnering with FreshDirect, grocery suppliers supply their produce like meat, seafood, and poultry. Suppliers are also listed on the application of FreshDirect to showcase products to the relevant buyers.

FreshDirect buyers: Buyers of FreshDirect, check and purchase fresh grocery supplies from suppliers. The stock purchased is taken to the warehouse of FreshDirect. All grocery items are stored in a temperature-controlled environment at the warehouse. A refrigerated truck later delivers the order to the consumer. As FreshDirect follows just-in-time practice, the order is prepared only after being placed by a customer.

3. Peapod: Multi-vendor Grocery Business Model

Peapod is one of the oldest grocery delivery services in the US. Following a hybrid approach, Peapod acts as a service provider like Instacart and an online supermarket. It offers fresh produce, meat, alcohol, refrigerated foods, meal kits, and more.

Though Peapod primarily fulfils orders through its warehouses, recently, it has partnered with grocery stores to provide delivery services. The company has ‘warerooms’ that are attached to the grocery stores where employees prepare and fill customer orders.

Operating as a multi-vendor marketplace, Peapod facilitates shipping and payments.

4. Walmart: Omnichannel Business Model

With the integration of physical and digital storefronts, Walmart provides consumers with channel engagement as per preference. It operates as an omnichannel business model. Customers are seamlessly served via the website, mobile application, and in-store interactions.

Its essential resources include brick and mortar stores, eCommerce stores, distribution and storage centres, mobile app, and human resources.

The key activity of Walmart is to buy and deliver goods. The company controls the costs involved. In addition, it invests in inventory control, omnichannel order orchestration, customer service, and distribution management. The company comprises three major categories:

• Retail
• Wholesale
• And other

Further, these categories consist of many formats: Hypermarkets, Supercenters, Supermarkets, eCommerce, warehouse clubs, and more.

Revenue Channels in Online Grocery Marketplace

1. Commission on each transaction:

Admin can charge a commission on every transaction from the seller.

2. Vendor subscription:

A vendor has to pay a fixed amount of money to the admin in order to list, access, and sell on a grocery eCommerce platform. A vendor can choose the required subscription plan from a number of available options and can also upgrade or downgrade the plan according to his/her requirements.

3. Commission on delivery:

On every transaction, the admin can charge a fixed delivery fee from both buyer and delivery boy.

4. Secondary revenue streams:

• On-site promotion for merchants/grocery sellers
• Hosting banners ads
• Start a blog and publish sponsored content on it
• Sell useful merchandise such as jars, reusable carry bags, etc. (it will also help you in branding)
• Seller user data to market research firms

Key Features for Online Grocery Marketplace

The key to the success of an online grocery delivery business is to integrate key features into your online grocery marketplace. It is essential that your grocery marketplace website is quick to load, easy to use, mobile-friendly, and has the following unique features:

Key Features to Attract Vendors & Buyers.

Other than understanding how to start an online grocery delivery business it is equally important to attract vendors and buyers for sustainable growth. Below listed are some offerings that you must include on your online grocery marketplace to attract vendors and buyers:

Crucial offerings for an online grocery marketplace to engage vendors

1. Shop management

This feature enables vendors to add, update, or edit their shop details such as name, address, delivery slots, operational hours, packaging time, working days, and more.

2. Order management

Order management option helps vendors to systematically manage multiple order requests at a single time. They can view the number of pending orders, total orders delivered, order history, cancelled orders, withdrawal requests, among other things.

3. Product management

This feature makes it easy for vendors to add or remove products based on the buyer’s demand and the current market scenario. They can update or edit product details and change the product status as available or unavailable.

4. Inventory management

Managing inventory operations without having a standardised inventory management system could be challenging. An online grocery marketplace integrated with an inventory management module helps vendors monitor their products’ stock and regularly track inventory status.

5. Tracking reports

Tracking and analysing sales reports on a daily basis is no longer a hectic task with this feature. Vendors can check the total earnings of their store and get daily sales updates to see the business performance.

6. Logistics support/delivery apps

An online grocery marketplace that comes with logistics support/delivery apps helps vendors manage logistics operations effectively. Vendors can easily deliver grocery items to buyers without any delay.

Crucial offerings for an online grocery marketplace to engage buyers

1. Multi-lingual

Multilingual functionality allows buyers to browse an online marketplace in their native language. Buyers from multiple regions can choose their preferred language and buy grocery items conveniently. 

2. Self-pickups/BOPIS

It is an advanced feature that helps buyers place an order online and collect it from the grocery store or any other pick-up location. 

3. Multi-cart

This feature enables buyers to add grocery items from different stores to a single cart and place a single order for all items at once.

4. Multi-payment

A multi-payment feature helps buyers to select the payment method of their choice. They should be able to complete payments via credit & debit cards, net banking, digital wallets, and cash on delivery, among other options available on the marketplace. 

5. Delivery scheduler

This feature enables buyers to schedule the order delivery as per their convenience. They can choose the preferred day and time of product delivery during the checkout process. With the delivery scheduler option, the buyer can ensure the doorstep delivery of the ordered item as per his / her availability.

6. Mobile app

An online grocery marketplace that comes with a buyer app makes online grocery shopping an enjoyable experience for buyers. Rather than searching for the online grocery marketplace on the web, buyers can place an order anytime and anywhere within just a few clicks through a mobile app.

How to Start an Online Grocery Business in 2025?

To launch an online grocery delivery business in 2025, two methods can be followed:

• Build from Scratch
• Using Ready-made Grocery eCommerce Platforms

Build from scratch

To build a grocery eCommerce marketplace from scratch you will need a dedicated development team of your own or will have to hire a leading website development company. Both the cases require hours for research, development, testing and deployment. The process adds up to the time, making it expensive.

Using Ready-made Grocery eCommerce Platforms

On the other hand, a ready-made grocery eCommerce platform is convenient and less expensive compared to development from scratch. Ready-made grocery eCommerce platforms come with pre-integrated features and APIs, there is a one-time payment, and the time required to create your online grocery delivery platform is less.

Growcer is one such readymade grocery ecommerce platform that can launch your online grocery business in a short time frame. It also offers exemplary features and functionalities and offers a lifetime license. Equipped with readymade buyer and grocery delivery apps, Growcer is a perfect platform to launch a grocery business online without any hassle quickly.

Other Specifications of Growcer Include: 

• Self-hosted 
• White-label
• Lifetime License
• Source code ownership
• One-time payment
• No recurring charges
• Mobile apps for customers and delivery personnel
• No coding required 
• Caters to 9+ business models in the grocery delivery industry
• Support 12+ multiple business niches 
• Global clientele 
• Highly rated software 

Cutting-Edge Features of Growcer:

Growcer offers industry-specific features providing intuitive and user-friendly interfaces for users. Let’s have a look at its wide array of features:

Customers:

• Pickup management
• Auto-detect user location
• Multi-cart 
• Guest user checkout
• Order tracking 
• Single item cancellation

Vendors: 

• Pick up management
• Delivery management
• Vendor’s dashboard 
• Order cancellation request management
• Sales, stock status, product inventory, product performance reports 
• Bulk import and export data

Delivery Personnel:

• Route navigation
• Push notifications
• Advanced Dashboard
• Order cancellation anytime
• Delivery order management

Admin:

• Commission management
• Advanced reports and analytics 
• Product catalog system
• Multiple revenue channels
• Tax management
• Delivery management
• Multiple revenue streams
• Auto order completion

Conclusion

Grocery consumption is a basic human need, and people are increasingly relying on online shopping to buy groceries, making it the right time for entrepreneurs planning to enter this industry. By starting an online grocery store you can tap into the opportunities offered by this industry. This blog provides all the essential information, assisting on how to start an online grocery delivery business from home effortlessly. 

FAQs

Q 1. How to start an online grocery business from home?

Ans. By leveraging a ready-made grocery delivery software you can easily start an online grocery business from the comfort of your home. Ready-made software solutions come pre-built with all the essential features and capabilities making it easy for entrepreneurs to start an online grocery delivery business by launching an online grocery delivery platform. 

Q 2. Can I start an online grocery store without coding or technical knowledge?

Ans. Certainly, with ready-made software like Growcer you can start your own online grocery store without any technical knowledge or coding skills. Moreover, with a lifetime license, you get complete ownership of the platform, and source code enables you to implement any enhancements if needed. Growcer offers all the essential capabilities to seamlessly launch and run an online grocery delivery business. 

Q 3. How much time does it take to start an online grocery business?

Ans. Well, the time to start an online grocery business depends on several factors such as the development approach you are selecting (ready-made software or custom development), feature integrations, customization requirements, and more. However, with ready-made software, you can launch your online grocery delivery business in 2 to 3 weeks, whereas, custom development may take a few months or even years to complete. 

Q 4. How can I promote my online grocery delivery business?

Ans. The next step after starting an online grocery delivery business is to promote it efficiently in the market so that it reaches the right target audience. Leverage different marketing channels such as social media marketing, paid advertising, content marketing, email marketing, and affiliate marketing to successfully market your grocery delivery platform in the industry.  

Q 5. What is the financial investment required to start an online grocery business? 

Ans. The financial investment required to start an online grocery business primarily depends on the development approach you choose to start your online grocery store. Ready-made software solutions are cost-effective while custom development requires a huge financial investment. The approximate cost to start an online grocery platform with custom development may be anywhere from $40,000 to 5,000,000. While the cost of ready-made software is approximately between $2,000 to 25,000. However, this cost may increase or decrease depending on the feature requirements, customization needs, and more.

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