Dark Store Market

Dark Store Market Outlook 2023 to 2033

The dark store market is likely to thrive at a robust CAGR of 38% from 2023 to 2033. The market is anticipated to cross a market share of USD 414.31 Billion by 2033 while it holds a value of USD 16.54 Billion in 2023.

Attribute	Details
Market Size Value in 2023	USD 16.54 Billion
Market Forecast Value in 2033	USD 414.31 Billion
Global Growth Rate 2023 to 2033	38% CAGR
Forecast Period	2023 to 2033

The research report on the dark store market explains that the changing lifestyle, along with the expanding online shopping activities, has started fueling the demand for dark stores. The concept of dark store works on the Direct-To-Customer (D2C), which is another business strategy of B2C retail sales.

The rising popularity of instant delivery options is a sophisticated way of storing groceries while integrating them with online delivery systems. The retailers apply this D2C strategy to increase their supply chain and extend their distribution channel. The advent of 5G network bandwidth, along with Artificial Intelligence understanding human preferences, is fueling the demand for dark stores around the globe.

Advanced technology to understand the customer’s intent and target the potential customer segment with the right set of marketing has helped the market. A dark store can be defined as a brick-and-mortar location that is shut down and has been transformed into a center for fulfillment operations. Though these spaces are not open to visitors, providing more space for storage and an easy way to deliver orders. This fuels the demand for dark stores across the globe.

Apart from the concept not being new, the pandemic has fueled the demand for a storage space that can fulfill the storage, logistics, and management needs of an online grocery store. Furthermore, the advancements include the dark store with multiple delivery options such as curbside pickup, in-store pickup, and home delivery. With advanced platform designs and enhanced networks, the market is more connected than ever. Thus, the opportunity for businesses that add ease to people’s life helps the business grow at a faster pace. The dark store provides a space for the product owner to cater to the audience and broader reach, expanding the dark store market size.

Historical Outlook versus Future Projections for Dark Store Market

The global dark store market was thriving at a CAGR of 24.5% between 2018 and 2022. The comparatively lower CAGR was attributed to the building phase of the market. COVID-19 has had a positive impact on the dark store market. Even in some parts of the world, the requirement of dark stores serving in a D2C manner was triggered due to the rising virus threat. Companies introduce their dark stores to reach customers directly from the production facility.

As per the report, multiple D2C brands in India have crossed Rs 100 crore in revenue in 3-5 years after their introduction. The market holds numerous opportunities for the future as it is anticipated to rise at a CAGR of 38% during the forecast period, attributing its growth to faster deliveries and a highly interactive shopping experience.

What are the Major Drivers and Restraints for the Dark Store Market?

Drivers:

The rising demand for dark stores is attributed to the benefits related to the concept of a dark store, such as quick and contact-free shopping, enhanced distribution and quicker delivery, a wide audience, improved SKU management, and extended distribution channels. The need for social distance and contactless transactions.

Dark stores let end users purchase their groceries or food item without letting them enter the dark store. The increased number of physical stores transformed into dark stores due to the higher sales and better showcasing of the products. The higher adoption of dark stores as the space lets you cater to a much larger potential audience due to the availability of 24/7. The advanced 5G networks with smartphones penetrating the urban strata of the regions push the demand for dark stores. Better stock-keeping unit management through enhanced click-and-collect capabilities helps the market perform better. The busy lifestyle of end users has let them shop through these dark store portals.

Restraints:

The major restraints for the market are lower awareness and people preferring conventional methods over virtual shopping. Furthermore, the major restriction for the market is the challenge of perishability. The location of the dark store should be in the high-order prone areas, which is not always possible for the supplier.

Category-wise Insights

Which segment is the most fruitful in the Dark Store Market by Age Group Category?

The age group category is divided into children, adults, and the elderly. The adult segment holds the higher traction for the dark store market, followed by the elderly age group. The adult segment has the highest access to the internet, and it follows most of the online shopping trends. At the same time, the elderly age group looks for ease when it comes to ordering groceries and household stuff through dark stores.

The Kesari Mahratta Trust reports that the adult age group holds a share of 42% (31-40 years old), while the elderly class holds a share of 16% (Above 60 years) and 15.1% (Between 41-50 years).

Which segment is the most fruitful in the Dark Store Market by Delivery Option Category?

The delivery option category is led by the online delivery option due to ease and time-saving process. Curbside pickup is also considered to be an easy option though COVID-19 and longer lockdowns have made end users habitual to the easy online delivery options when it comes to getting something online.

Country-Wise Analysis

5G Networks and Higher Integrated Smartphone Technology fuels the Demand for Dark Store in the Region

North America, with a rising number of dark stores due to the higher per capita income and increased penetration of smartphones, leads the market. It holds a share of 35.8% in 2023, owing to the presence of major brands with multi-dimensional distribution channels along with the busy schedule of people residing in the region. FMI explains that the adult population living in the USA makes more than 30 online purchases every month.

Higher Brands Listings along with the Pandemic Skyrocketing the eCommerce Businesses Gains Traction for the European region

The rising number of brands that adopt the concept of the dark store is due to the easy availability of the product coupled with the cost-friendly setup. The dark store provides online delivery of the desired items. Thus, the pandemic has fuelled the usage of dark stores though dark stores have witnessed backlash among the cities across Europe as the locals complain of traffic and trash.

Emerging Economies such as China and India’s Adoption of Digital Contactless Payments and Higher Acceptance rate for Online Shopping is Fueling the Sales of Dark Stores in the Region

India and China are increasing the per capita income of their citizens. Thus, technological adoption is also higher than its counterparts. India’s digital economy has expanded its boundaries and has attracted concepts like dark stores. With thousands of startups working, dark store startups are also booming in the urban part of the country. While China, with a more enclosed economy, has launched its own platforms for the regulation of dark stores, easing the process of enlisting the products and delivering them.

Competitive Landscape

The competitors focus on making stores with better accessibility and availability. The brands providing n number of payment options and delivery options while also providing same-day delivery options fuels the market competition. Furthermore, the key players adopt the strategy of acquisition, merger, and other expansionist tricks to strengthen their supply chain.

Recent Market Developments

• June 2022: Naturepro has introduced same-day delivery across India along with the opening of ZFW dark stores. Both brands have partnered to promote sustainable and affordable products.
• September 2022: Intacart has acquired Rosie to implement and use its technology in locally operated grocery spaces, expanding the customer base and distribution channels.
• Amazon India has signed MOUs with the Council of Handicraft Development Corporation (COHANDS) to promote the products under the Karigar program, which is an initiative that supports local craftsmen.

Key Players

• Amazon.com, Inc.
• Swiggy
• Uber
• Ola Foods
• Supermarket Grocery Supplies Pvt Ltd.
• Walmart, Inc.
• Target Brands, Inc
• Dunzo Daily
• Instacart
• Auchan
• Wolt
• Flipkart
• Grab

Scope of the Report

Attribute	Details
Forecast Period	2023 to 2033
Historical Data Available for	2018 to 2022
Market Analysis	USD Billion for Value and Units for Volume
Key Regions Covered	North America; Latin America; Europe; Asia Pacific; Oceania; and Middle East and Africa(MEA)
Key Countries Covered	USA, Canada, Mexico, Germany, United Kingdom, France, Italy, Spain, China, Japan, India, South Korea, Australia, Brazil, Argentina, South Africa, and United Arab Emirates(UAE)
Key Segments Covered	Product, Grade, Source, Form, Applications, and Region
Key Companies Profiled	Amazon.com, Inc.; Swiggy; Uber; Ola Foods; Supermarket Grocery Supplies Pvt Ltd.; Walmart, Inc.; Target Brands, Inc; Dunzo Daily; Instacart; Auchan; Wolt; Flipkart; Grab
Report Coverage	Market Forecast, Company Share Analysis, Competition Intelligence, Drivers, Restraints, Opportunities and Threats Analysis, Market Dynamics and Challenges, and Strategic Growth Initiatives
Customization & Pricing	Available upon Request

Dark store Market by Category

By Age Group, Dark Store Market is Segmented as:

• Children
• Adults
• Elderly

By Category, Dark Store Market is Segmented as:

• Groceries
• Meat
• Dairy

By Delivery Options, Dark Store Market is Segmented as:

• Curbside Pickup
• In-Store Pickup
• Home Delivery

By Non-Food Products, Dark Store Market is Segmented as:

• Cleaning
• Essentials
• Bath & Body

By Region, the Dark store Market is Segmented as:

• North America
• Europe
• East Asia
• South Asia & Pacific
• Middle East and Africa(MEA)

Frequently Asked Questions

How big is the Dark Store Market?

The dark store market is anticipated to have a market value of USD 16.54 billion in 2023.

Which is the biggest market region for Dark Store Market?

The North American region holds the biggest share of 35.8% in the Dark store market

At What Rate Will Dark Store Demand Grow across the World?

The demand for dark stores around the globe is expected to grow at a CAGR of 38% between 2023 and 2033.

How was the performance in the last five years?

The dark store market grew at a CAGR of around 24.5% from 2018 to 2022.