The online food delivery market in India is experiencing substantial growth, with Zomato leading in market share and Swiggy’s overall gross order value steadily increasing. By 2030, the industry is projected to expand significantly, driven by convenience and enhanced customer experience.
India’s food delivery market is on a robust growth trajectory. A joint report by Bain & Company and Swiggy predicts the market will cross Rs 2 lakh crore by 2030, growing at a compound annual growth rate (CAGR) of 18%. This expansion is fueled by increased digitization, higher disposable incomes, and a growing inclination among consumers to explore new culinary experiences.
Current Market Scenario
Market Size and Growth Rate
According to the report, the food delivery segment’s share in India’s food services market is expected to rise to 20% over the next seven years from the current 12%. The overall food services market, which includes dining out, ordering in, and other non-home-cooked food segments, is projected to double to Rs 9-10 lakh crore by 2030 from the current Rs 4-5 lakh crore.
Recovery and Resilience
The food delivery market experienced a slowdown in late 2023 but has been on a recovery path since the beginning of 2024. Rohit Kapoor, CEO of Swiggy’s food marketplace, noted that despite the temporary dip, structural issues in the market are minimal, and restaurant supply is increasing.
Factors Driving Growth
Improved Customer Experience
Enhanced customer experience, higher incomes, and a penchant for trying new things are key factors driving the market. Millions of new customers, particularly in the 16-22 age bracket, are expected to fuel the food delivery business in the coming years.
Increasing Average Spend
In 2023, the average spend per order on food was Rs 220-230. This figure is not expected to rise sharply, with projections for 2030 estimating the average order value at around Rs 230-250. Despite this modest increase, the ratio of average order value to GDP per capita in India remains higher than in markets like China, the US, the UK, Indonesia, and Brazil.
India’s food delivery market is set for substantial growth, driven by convenience, higher incomes, and enhanced customer experiences.
Market Penetration and Regional Insights
Growth in Eating-Out Occasions
The number of eating-out occasions is predicted to grow to 90-95 times a year by 2030, up from 60-65 times annually in 2023. India’s top 50 cities will continue to be the primary consumption hotspots, accounting for around 65-70% of the total food services market by 2030.
Emergence of New Formats
Convenience-led eatery formats such as quick service restaurants (QSRs) and cloud kitchens are expected to outpace the broader food services market in terms of growth. These formats are likely to grow 1.4 times between 2023 and 2030, compared to the broader market’s estimated CAGR of 11%.
Competitive Landscape
Dominance of Swiggy and Zomato
Swiggy and Zomato dominate India’s online food delivery segment. A research note by Goldman Sachs indicated that Zomato holds a 57% market share in the online food delivery market. Swiggy’s overall gross order value grew by 26% year-on-year in 2023, while Zomato reported a 31% year-on-year growth in the same period.
New Entrants
The food delivery market is also witnessing the entry of new players like Ola and Paytm, leveraging the government’s Open Network for Digital Commerce (ONDC) to offer food delivery services.
Zomato’s Milestone Achievements
Record Market Capitalization
Zomato’s market capitalization has soared, surpassing several established companies in the Nifty 50 index. The company’s strategic decision to increase the platform fee by 20% in key markets has been well-received, propelling its shares to record highs.
Strong Year-to-Date Performance
Zomato’s stock has surged almost 83% year-to-date in 2024, reflecting strong investor confidence in its business model. Global brokerage firm UBS has maintained a bullish stance on Zomato, increasing the target price to ₹260 from ₹250.
Future Outlook and Challenges
Sustaining Growth
As Zomato and Swiggy continue their upward trajectories, they face the challenge of maintaining momentum while balancing customer satisfaction and profitability. Innovation, expansion of service offerings, and operational optimization will be crucial for sustaining their market positions.
Here is the table of key facts for India’s food delivery market:
These key facts highlight the significant growth and potential of India’s food delivery market.
| Key Facts | Details |
|---|---|
| Expected market size by 2030 | Rs 2 lakh crore |
| Current CAGR of the market | 18% |
| Current share of online services in food delivery | 12% |
| Projected share of online services by 2030 | 20% |
| Current size of overall food services market | Rs 4-5 lakh crore |
| Projected size of overall food services market by 2030 | Rs 9-10 lakh crore |
| Average spend per order in 2023 | Rs 220-230 |
| Estimated average spend per order by 2030 | Rs 230-250 |
| Projected number of eating-out occasions by 2030 | 90-95 times a year |
| Top 50 cities’ market share by 2030 | 65-70% |
| Growth of QSRs and cloud kitchens compared to broader market | 1.4 times growth |
| Zomato’s market share in online food delivery | 57% |
| Swiggy’s year-on-year growth in 2023 | 26% |
| Zomato’s year-on-year growth in 2023 | 31% |
| Zomato’s stock performance year-to-date in 2024 | 83% increase |
(India CSR)
