People in India order food on average 3-5 times a month
India's online food delivery sector has now entered a new phase of rapid growth. According to a report by Investec Equities, now the growth of this sector will be determined not only by the addition of new users, but by people ordering repeatedly and increasing reach in small cities.
Market may triple by 2030
According to the report, India's online food delivery market may grow from around $9.1 billion in 2024 to around $27 billion by 2030. That means this sector will grow at the rate of about 19% annually. Digital use and urbanization are playing an important role in this.
The share of online ordering is still low
India's total food service market is expected to grow from Rs 4 lakh crore in FY20 to Rs 7 lakh crore in FY25 and may reach Rs 11-12 lakh crore by FY30. Despite this, the share of online and outside eating is still only 13%, which is much less than countries like America and China.
Demand is increasing due to changing lifestyle
Reasons like smaller families, longer working hours and migration to cities are motivating people to eat out more often or order online. This trend is increasing rapidly especially among the youth and working class.
New growth coming from small towns
Metros and big cities still hold 75-80% of the market, but the contribution of Tier-2 and smaller cities has reached 20-25%. These cities are now becoming the major basis for the next growth of this sector.
Impact of organized sector and technology
Due to branded restaurants, cloud kitchens and better delivery network, the share of organized sector is increasing rapidly. Also, with the increasing penetration of smartphones and internet, ordering has become even easier.
Expecting further growth
At present, people in India order food on an average 3-5 times a month, whereas in developed countries this figure is higher. In such a situation, there is every possibility that both the number of orders and the average expense (AOV) will increase in the coming time. Due to low penetration, growing digital habits and participation of smaller cities, India's food delivery market is likely to be one of the fastest growing markets in the world in the coming years.
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