Everyone is a foodie. We keep listening to our taste buds by eating various things. But given the hectic schedule, not many are able to cook food for themselves. So, they order it online or by calling the restaurant owner to deliver it to their homes.  

Online food ordering has become the new normal these days. They constantly place orders with restaurants and get food delivered to their homes.

During Covid-19, online food ordering gained pace due to the government’s restriction on people movement. 

Also, Indians are very particular about food. Different cuisines, such as Mughlai, South Indian, Rajasthani, Gujarati, North Indian, etc., hint the same.

Online Food Market Size in India 

When the concept of online food delivery was introduced, its aim was to help people order and receive food at their home. But after the development of food apps, people have ample options to choose their favourite cuisine and order them. 

Besides, apps give updates about the expected duration of food preparation and delivery to their users. These features ensure customers feel easy and can know the quality of food and at what time it will be delivered to them. So, people started ordering food online frequently, further driving the food delivery market. 

In the beginning, online food delivery was concentrated mainly in urban regions of the country. But now companies have started delivering to people living in small cities, increasing their reach and revenue. 

According to Statista, revenue in India’s food market is expected to reach an impressive $34.68 billion in 2023. The market research company pegs the annual revenue growth rate at 19.88%, which will likely raise the market volume to $71.63 billion by 2027. 

Online Food Delivery Market Components

India’s online food delivery market has basically two components – Meal Delivery and Grocery Delivery. Further, Meal Delivery has Restaurant Delivery and Platform Delivery as its components. Similarly, Grocery Delivery is classified into Retail Delivery, Quick Commerce and Meal Kit Delivery. 

Restaurant to customer delivery segment means the delivery of food from restaurants to their customers. Restaurants will carry out these deliveries directly. Regardless of whether customers have booked orders on restaurant aggregators or on the restaurant’s website. 

Whereas platform deliveries mean the deliveries will be carried out by restaurant aggregators. They will deliver based on the orders customers book on their website or app.

Retail delivery means the transportation of food and non-food products from a grocery store. Here the delivery is carried out by the retailers. Retailers run an online shop where the booking happens. These are typically same-day deliveries.

Quick Commerce means the last-mile delivery services or about running dark stores with limited products but faster deliveries. 

Meal kit delivery is like a subscription plan allowing customers to choose the number or recipe meals they want to be delivered at their doorstep.

Market Projections

Restaurant to consumer delivery segment’s revenue is estimated to be US$10.13 billion. The annual growth rate in the revenue is expected to be 5.25%, which would likely take the market volume to US$12.43 billion by 2027. That will likely raise the user count in this market segment to 393.80 million by 2027.

The platform-to-consumer delivery market’s revenue is likely to be US$4.5 billion in 2023. The annual growth rate in its revenue is estimated to be 9.75%, raising the market volume to US$6.59 billion by 2027. The total user count is estimated to be 176.20 million by 2027.

The retail delivery segment’s revenue is estimated to be US$18.60 billion in 2023. The revenue will likely see an annual growth rate of 25.65%, which would raise the market volume to US$43.36 billion by 2027. The user count will likely climb to 247 million by 2027.

The revenue of the Quick Commerce market is estimated to touch US$1408 million by 2023. It will likely see an annual growth rate of 45.13%, taking the market volume to $6,247 million by 2027. The user count will likely get raised to 52.09 million by 2027. 

In 2023, the Meal Kit Delivery’s revenue is expected to touch US$17.98 billion. With revenue expecting to rise annually by 9.26%, a massive market volume of 25.62 billion is likely by 2027. Around 40 million users are expected to be in the Meal Kit Delivery market by 2027.

03US$10.13 Billion

Key Factors That Drive Food Delivery Market 

Mobile and Internet

One of the key factors behind the growth of the food market is mobile. As smartphones have become quite popular to people, they mostly use mobile internet to order. Meanwhile, food companies have developed food apps, helping the market achieve more growth. Because with the help of mobile and internet, people can order food online anywhere and anytime. And companies deliver food within a given time.

Hectic Lifestyle

Life is getting too hectic for all of us. There’s virtually no time for people to visit a traditional store and buy products. So, they order food, groceries, daily-use items or other products online and get all delivered to them. 

Increase in Disposable Income

Years ago, people had a single source of income, where the head of the family would earn money and the rest all feed on it. On the contrary, nowadays, families have become dual and multi-income families, allowing people to purchase more. Today, parents as well as their kids earn, so they can make individual buying decisions regarding food and other stuff. Further, online food market policies also attract people to order food online. These companies claim to deliver food within limited times, which has become one of the core reasons for people to order food online. 

Encouraging Demographics

India is one of the biggest consumer markets with a population of more than 1.4 billion. As per estimates, around 50% of India’s total population are under 25 years. Which means India is a country of youth. Meanwhile, food companies receive orders mostly from people with an age group of 18-40 years. That gives you an idea how young India is driving India’s food business.

Conclusion

Online food delivery has become the new normal. Several factors have contributed to the same. These include use of the mobile internet, change in people’s lifestyle, and a third-party delivery system. Online food delivery trends benefit both shopkeepers and their customers. Customers get deliveries on time, while helping businesses grow significantly. Handover is an initiative that helps businesses grow with its timely, cost-effective, scalable and reliable delivery services. It has skilled delivery partners who deliver food and other stuff safely to the customers.