by The dark store market comprises grocery stores or micro-fulfillment centers that primarily fulfill online orders rather than in-store customers. Dark stores aim to optimize the online order fulfillment process by locating inventory close to demand. Key aspects of dark stores include minimizing costs through compact footprints, leveraging automation and technology to increase fulfillment speed and capacity, and strategic locations near population clusters. The emergence of dark stores has enabled retailers to meet rising e-commerce demand for quick and affordable grocery delivery.
The Global Dark Store Market is estimated to be valued at USD 21.78 Bn in 2024 and is expected to reach USD 212.03 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 38.4% from 2024 to 2031.
Key Takeaways
Key players operating in the dark store market are Albertsons, Amazon.com, Inc., Auchan, DoorDash, Dunzo Daily, Flipkart, FreshDirect, Grab, Instacart, JD.com, Kroger, Ocado, Ola Foods, Swiggy, and Walmart, Inc. Dark stores allow retailers to fulfill online grocery orders more efficiently through compact facilities located close to residential areas. This helps reduce fulfillment times and costs as compared to traditional large-format stores. Rapid growth of online grocery shopping post-pandemic has bolstered demand for dark stores globally. With rising consumer preference for quick delivery, especially of daily essentials, retailers are increasingly adopting the dark store model.
Dark Store Market Demand expansion of grocery markets. Large retailers are entering new international markets by leveraging their dark store infrastructure and relationships with delivery partners. For instance, Amazon acquired Whole Foods’ physical stores and is utilizing them as local dark stores along with delivery-only locations to meet demand across the U.S. Similarly, Swiggy has launched Instamart in various Indian cities utilizing dark stores to provide quick deliveries.
Market Key Trends
One of the major trends driving the dark store market is rapid automation. Leading grocery retailers are investing heavily in automated micro-fulfillment centers and robots for warehouse management and order picking. Automation helps optimize operations, reduce costs, and scale up fulfillment capacities. For example, Ocado utilizes thousands of robots in its stores to pick and sort groceries. Automation also helps address labor shortages and improves order accuracy. With growing e-commerce demand, automation adoption in dark stores is expected to rise significantly over the coming years.
Porter’s Analysis
Threat of new entrants: New companies can enter the market easily as the initial investment required is low but established players have economies of scale and brand recognition.
Bargaining power of buyers: Buyers have high bargaining power as there are many established players in the market providing similar services. Buyers can easily switch between providers based on better offers.
Bargaining power of suppliers: Supermarkets and local shops who supply goods to dark stores have low bargaining power as there are many alternative suppliers.
Threat of new substitutes: New delivery models can emerge as substitutes like drone delivery but setting up such processes require high investments.
Competitive rivalry: The market is dominated by few major players and competition is highly intense. Players compete based on delivery time, product quality, price and range of products.
Geographical regions: North America currently holds around 35% share of the overall dark store market in terms of value owing to high demand for fast delivery in countries like US and Canada. Asia Pacific is another major region accounting for 30% share due to growing e-commerce sectors in China, India and other Southeast Asian countries.
Fastest growing region: Asia Pacific region is expected to witness highest CAGR of over 45% during the forecast period due to rising middle class population, increasing internet penetration and swift growth of e-commerce sectors in emerging economies of China, India and Southeast Asia. Expanding retail infrastructure and strong investments by key players will further boost regional market.
*Note:
1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it.
About Author - Money Singh
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. LinkedIn Profile
