Online Food Delivery Market in India 2022-2027

Online Food Delivery Market in India 2022-2027

Online food delivery service providers supply cooked meals and food items that are ordered online, mainly through mobile apps, for direct consumption. Food ordered through delivery providers are delivered to customers either by a restaurant-run delivery team (for example, Domino’s), or by a platform-run delivery team (for example, Zomato). The number of online food apps is rapidly increasing. These apps allow people to order and pick up food parcels and have them delivered to their homes.

Market insights:

The online food delivery market in India was valued at INR 410.97 Bn in 2021. The market is expected to reach INR 1,845.76 Bn by the end of 2027, expanding at a CAGR of 30.00% during the 2022 – 2027 forecast period. Rapid digitalization and acceptance of online food delivery services among consumers across tier I and tier II cities are propelling the growth of the market.

Increased adoption of the internet and smartphones, rise in the number of working families, especially the growing participation of women in the workforce, and rapid lifestyle changes drives the market.

Key growth drivers of the market:

The growing smartphone user base and increasing adoption of the internet are driving the demand for app-based online food ordering in India. The simultaneous growth in acceptance and penetration of online food delivery mobile apps in tier I and tier II cities across India is leading to the growth of the market. Several online aggregators have tied up with restaurants to offer combo packages and one-serve meals to attract customers. Food delivery platforms have introduced subscriptions for loyal customers to do away with delivery charges imposed on every meal.

Key deterrent to the growth of the market:

Penetrating beyond tier II cities is a challenge because the online food delivery market in India is dominated by unorganized players. The rise of fake food shops on food delivery platforms has created inconveniences to both customers and food delivery executives. Also, various food platforms charge high prices for delivering food to customers, especially during peak hours.

COVID-19 impact analysis:

The nationwide lockdowns due to the COVID-19 pandemic initially caused some disruptions in the growth of the online food delivery market. However, it has positively impacted the market fulfilling people’s urge to eat outside while still complying with social distancing norms. The surge in online food orders recorded from Q3 2020 subsided during the second wave in April 2021 but has now returned to pre-COVID-19 levels.