India Online Food Ordering and Delivery Market to Grow with a CAGR of 26.89% through 2029
India Online Food Ordering and Delivery market is
experiencing robust growth driven by a variety of factors such as a combination
of increased digital penetration, changing lifestyles, and strategic restaurant
partnerships.
According to TechSci Research report, “India Online
Food Ordering and Delivery Market - Industry Size, Share,
Trends, Competition Forecast & Opportunities, 2028”, the India
Online Food Ordering and Delivery Market stood at USD 28.3 billion in 2022 and
is anticipated to grow with a CAGR of 26.89% in the forecast period, 2025-2029.
The India online food ordering and delivery market has witnessed a remarkable
transformation in recent years, reshaping the way people dine and enjoy their
favorite meals. This industry has seen explosive growth, driven by a
combination of factors such as changing consumer preferences, technological
advancements, increased internet penetration, and a burgeoning urban
population.
The concept of ordering food for delivery is not new
to India, as it has long been a part of the culture, with street food vendors
and dabbawalas in Mumbai serving as early examples. However, the advent of the
internet and the proliferation of smartphones brought about a seismic shift in
the way food is ordered and delivered. The first wave of online food ordering
platforms in India emerged in the mid-2000s, but it wasn't until the early
2010s that the market truly began to take off.
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The India
online food ordering and delivery market is highly competitive and fragmented,
with numerous players vying for a piece of the pie. Some of the major players
include Swiggy, Zomato, UberEats (now acquired by Zomato), and Foodpanda (now
merged with Ola). These platforms offer a wide array of cuisines, from local
favorites to international delicacies, and cater to various consumer segments.
Swiggy, founded in 2014, has established itself as a
market leader with its extensive network of restaurants and a robust delivery
system. Zomato, founded in 2008, initially started as a restaurant discovery
platform but later ventured into food delivery, becoming a fierce competitor to
Swiggy. The intense rivalry between Swiggy and Zomato has shaped the dynamics
of the market, leading to innovations, discounts, and promotional offers to
attract and retain customers.
The entry of UberEats (now integrated into Zomato) and
Foodpanda further intensified the competition. These platforms brought in their
expertise in ride-hailing technology to enhance food delivery services.
However, the market consolidation over the years has reduced the number of
major players, creating a more stable competitive landscape.
One of the driving forces behind the growth of online
food ordering in India is changing consumer behavior. Urbanization, hectic
lifestyles, and the desire for convenience have led people to opt for the
convenience of ordering food online rather than cooking at home or dining out.
The younger demographic, in particular, has embraced this trend, preferring to
use mobile apps for ordering food.
The COVID-19 pandemic accelerated this shift in
consumer behavior as lockdowns and social distancing measures made dining out
less feasible. Many consumers who had never used online food delivery services
before turned to them for their meal requirements, further boosting the market’s
growth.
Another noteworthy trend in the India online food
ordering market is the increasing demand for healthier food options. Consumers
are becoming more health-conscious and are actively seeking out restaurants and
dishes that align with their dietary preferences, whether it’s vegetarian,
vegan, gluten-free, or organic options. This has led to a rise in specialized
food delivery platforms focusing on healthy and organic foods.
Despite its rapid growth, the India online food
ordering and delivery market faces several challenges. One of the primary
concerns is the profitability of food delivery platforms. Achieving
profitability in this highly competitive market has proven to be a daunting
task. The need to offer discounts and promotions to attract and retain
customers, along with the costs associated with delivery logistics and
restaurant partnerships, often outpaces the revenue generated. As a result,
many platforms operate at a loss, relying on investor funding to sustain their
operations.
Food quality and hygiene standards are also a critical
challenge. Ensuring that food remains safe and of high quality during transit
is essential to retain customer trust. Complaints related to food quality,
delayed deliveries, or incorrect orders can harm a platform’s reputation and
drive customers away.
Additionally, regulatory challenges and local laws
pose hurdles for online food delivery platforms. Different states and cities in
India have varying regulations related to food safety, licensing, and delivery
hours. Navigating this complex regulatory landscape can be cumbersome for
companies operating across multiple regions.
Another challenge is the increasing scrutiny of the
gig economy and the classification of delivery personnel as gig workers. The
debate over workers’ rights and fair compensation has implications for the cost
structure and operational efficiency of food delivery platforms.
Despite the challenges, the India online food ordering
and delivery market continues to evolve and innovate. Several trends and
developments are expected to shape its future:
Many platforms are focusing on hyperlocal delivery to
reduce delivery times and costs. This involves setting up smaller distribution
centers in neighborhoods to serve customers more efficiently. Additionally, the
rise of ghost kitchens, which are delivery-only kitchens, is changing the
restaurant landscape. These kitchens operate without dine-in facilities,
catering exclusively to online orders, reducing overhead costs for restaurant
owners. Furthermore, integration of AI and machine learning for personalized
recommendations, route optimization, and demand forecasting will enhance the
efficiency of food delivery.
With increased awareness of environmental issues,
consumers are looking for sustainable packaging and delivery options. Platforms
are exploring eco-friendly packaging and electric vehicle fleets. Additionally,
online food delivery platforms are diversifying their services beyond food
delivery, offering groceries, medicine delivery, and more, creating new revenue
streams.
Health and Wellness: Continued growth in the demand
for healthier food options will lead to more specialized platforms catering to
specific dietary preferences. Furthermore, as urbanization spreads to smaller
cities and towns, online food delivery platforms are expanding their reach,
tapping into new markets.
India Online Food Ordering and Delivery market is
segmented into operation type, platform, payment, and region.
Based on operation type, the market is segmented into food
aggregators & restaurant based. Among these, restaurant based have a
significant share in the India online food ordering and delivery market. Restaurant-based
platforms have managed to build extensive networks of partner restaurants
across various cuisines and price ranges. This diversity caters to a wide
spectrum of consumer preferences, making these platforms a one-stop solution
for customers looking for a diverse selection of meals.
Based on region, the market is segmented into North,
West, East, and South. Among these, South has a significant share of the India
online food ordering and delivery market. The South region of India is known
for its high levels of internet penetration and smartphone usage. The
tech-savvy population in urban centers like Bangalore, Chennai, and Hyderabad
has readily embraced online food ordering and delivery services. These cities
are home to a large number of young professionals and students who prefer the
convenience of ordering food online through mobile apps. This demographic trend
has boosted the demand for online food delivery services in the South.
Major companies operating in India online food
ordering and delivery market are:
- Jubilant FoodWorks
- Zomato Limited
- Box8
- Bundl Technologies Private Limited
(Swiggy)
- FoodVista India Private Limited
- Rebel Foods Private Limited (Faasos)
- Yum! Brands, Inc.
- Biryani by Kilo
- Eat.Fit
- Fresh Menu
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“The India
online food ordering and delivery market has witnessed phenomenal growth,
driven by changing consumer preferences, technological advancements, and the
convenience of mobile apps. Despite challenges related to profitability, food
quality, and regulatory hurdles, the industry continues to evolve and innovate.
The future promises more personalized and sustainable food delivery options,
diversification into related services, and expansion into untapped markets. As
the Indian dining landscape undergoes this digital transformation, online food
ordering and delivery are expected to remain a dominant and indispensable part
of the culinary experience in the years to come.” said Mr. Karan Chechi,
Research Director with TechSci Research, a research-based management consulting
firm.
“India Online Food Ordering and Delivery Market By
Operation Type (Food Aggregators & Restaurant-based), By Platform (Mobile
Applications and Websites), By Payment (Mobile Wallet, Card Payment, Cash on
Delivery, and Net Banking), By Region, By Competition Forecast &
Opportunities, 2019-2029F, has evaluated the future growth potential of India
online food ordering and delivery market and provides statistics &
information on market size, structure, and future market growth. The report
intends to provide cutting-edge market intelligence and help decision-makers make
sound investment decisions. Besides, the report also identifies and analyzes
the emerging trends along with essential drivers, challenges, and opportunities
in India online food ordering and delivery market.
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