The online food delivery market in India is experiencing rapid growth and has a strong outlook for the future. Below are the key insights:
- Market Size and Growth: Grew from ?112 billion (US$1.4 billion) in 2018 to ?640 billion (US$8 billion) in 2023. Expected to reach ?1,400-1,700 billion (US$17-21 billion) by 2028, with a CAGR of 17-22%.
- Urban Penetration: Top 60 cities (metros and Tier 1) contribute 75-80% of the market, indicating significant untapped potential beyond these regions.
- Frequency of Usage: Penetration of online food delivery services rose from 3% in 2018 to 11% in 2023. Monthly Transacting Users (MTUs) are expected to grow from 20-25 million in 2023 to 35-45 million by 2028.
- User Base Expansion: Annual Transacting Users (ATUs) reached 80-85 million in 2023. Urban migration and digital adoption are contributing to new user acquisitions.
- Average Order Value (AOV): Increased from ?290-320 in 2018 to ?425 in 2023. Expected further growth driven by premium offerings and increased disposable income.
- Unorganised Sector: Around 70-75% of the restaurant industry in India remains unorganised, presenting a significant opportunity for digital platforms to standardize and expand the supply.
- Growth Factors: Increasing availability of organised restaurant supply and urban lifestyle changes. Rising frequency of eating out due to time constraints and improved purchasing power among young urban consumers.
- Cloud Kitchens: Cloud kitchens have grown from ?15 billion (US$0.2 billion) in 2018 to ?80 billion (US$1 billion) in 2023, showcasing their growing role in the ecosystem.
The data reflects strong momentum in urban markets, a shift in consumer preferences towards convenience, and increasing digital penetration, all of which are driving the rapid growth of the online food delivery market in India.
