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Online Food Delivery Market in India 2020

Online Food Delivery Market in India 2020

  • November 2020
  • 50 pages
  • ID: 5885835
  • Format: PDF
  • Netscribes (India) Pvt. Ltd.


Table of Contents

The online food delivery market in India is growing in tandem with the evolving lifestyle and eating habits of Indians. Hectic work schedules and rise in disposable incomes have popularized food delivery, especially in urban areas.

The online food delivery market in India was valued at INR 317 Bn in 2019 and is expected to reach INR 630.61 Bn by 2025, expanding at a CAGR of 12.79% during the 2020-2025 period.
Major players in the market include platform-to-customer service providers such as Swiggy (Bundl Technologies Private Limited), FreshMenu (FoodVista India Private Limited), and Zomato (Zomato Media Private Limited). Apart from these, there exist certain companies that operate with a restaurant-to-customer delivery model such as Box8, Domino’s (Domino’s Pizza, Inc.), and KFC (Yum! Brands, Inc.). Several new players such as Amazon and MakeMyTrip have also entered the market, disrupting the online food delivery industry
Investment in established industry players such as Zomato and Swiggy has increased consistently over the years. In April 2020, Zomato and Faasos received funding worth INR 382 Mn and INR 3.78 Bn, respectively. Zomato raised the fund from Horizon Investment Trust, and Faasos received it from its existing investor, Coatue Management, a US-based hedge fund.

COVID-19 Impact
Order volumes in the online food delivery market in India contracted considerably between March and June 2020, with the implementation of the nationwide lockdown, in the wake of the pandemic. The industry started facing disruption from the beginning of March 2020, when online food delivery services registered a 70% decline in the number of daily orders. However, in October 2020, Swiggy reported that its pan-India food delivery business has recovered around 80% to 85% of its pre-COVID-19 order value, mainly fueled by the ongoing cricket season.

Key growth driver of the market
In the recent years, the number of working women has increased in the Indian workforce, especially in the city-based organized sectors. The number of double income families has, therefore, increased. Cooking becomes a hassle at times for people with hectic work schedules. Moreover, the dual income scenario has increased the overall spending capacity of families. Also, the key players such as Swiggy, and Zomato provide lucrative offers to customers, both existing and new, in order to keep up the stiff competition in the online food ordering market.

Key deterrent to the growth of the market
Recently, there have been several instances of spurious and closed restaurants and food shops taking orders on food platforms. Cases of certain outlets, registered on food delivery apps, that are makeshift, or operate out of home joints, with hardly any focus on hygiene and quality, have been reported. This has caused annoyance among both customers and food delivery executives. Also, consumers have expressed concerns over the quality of food since these unauthorized food stalls seldom maintain hygiene. Consequently, customers have exhibited discontent with online food delivery platforms.

Companies covered
• Box8
• Bundl Technologies Private Limited
• FoodVista India Private Limited
• Rebel Foods Private Limited
• Zomato Media Private Limited
• Domino’s Pizza, Inc.
• Yum! Brands, Inc.

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