A surge in digital ordering and expanding customer base to propel the market to Rs 2.12 trillion, claims Bain & Company and Swiggy report
India’s online food delivery market is on track to reach an impressive Rs 2.12 trillion by 2030, securing a 20 per cent share in the broader food services market, according to a recent report by Bain & Company and Swiggy titled ‘How India Eats.’
The study predicts the online food delivery segment will experience a robust compound annual growth rate (CAGR) of 18 per cent over the next six years. This growth trajectory outpaces the overall food services market in India, which includes both dining out and food delivery. Currently valued at Rs 5.5 trillion, the food services market is expected to grow at an annual rate of 10-12 per cent, reaching Rs 9-10 trillion by 2030.
The increasing penetration of online food delivery has been a significant driver of this growth. From 8 per cent in 2019, it rose to 12 per cent in 2023, marking a 2.8-fold increase. This surge is driven by several factors including an expanding customer base, more frequent consumption occasions and a rise in supply.
Rohit Kapoor, CEO, Food Marketplace at Swiggy, commented on the sector’s momentum, “The Indian food services market, especially food delivery, has witnessed buoyant growth over the last few years. Higher incomes, digitisation, improved customer experience and an inclination to try new experiences have all contributed to this growth.”
Kapoor highlighted the potential for growth by comparing India to China, noting that China has four times the number of restaurants per million urban population. He suggested that as restaurant density in India increases, it will significantly reduce delivery costs by shortening delivery distances.
The report also forecasts faster growth for convenience-driven formats such as Quick Service Restaurants (QSRs) and cloud kitchens. These segments, offering quick service, simplified menus and value for money, are expected to grow 40 per cent faster than the overall market from 2023 to 2030.
Navneet Chahal, Partner at Bain and Company and co-author of the report, added, “By 2030, the market is poised to serve an additional 110 million customers, gradually shifting eating out from a special event into a convenient lifestyle.” The addressable customer base for the Indian food services market is expected to grow from the current 320-340 million to approximately 430-450 million by 2030, bolstered by rapid urbanisation and rising affluence.
As of 2023, around 70 per cent of food services consumption is concentrated in the top 50 cities and among upper-middle and high-income segments. However, future growth is expected to come from tier 2 and beyond cities.
The report also noted that Gen-Z and younger cohorts, who currently make up 40 per cent of food service consumption, have a higher propensity to eat out. This trend is expected to grow as their purchasing power increases.
On average, each customer orders more than three different cuisines from over six restaurants annually on online platforms, reflecting the Indian consumer’s desire for variety. Currently, Indian consumers dine out an average of five times per month, a frequency expected to rise to 7-8 times by 2030, mirroring trends in developed markets like the US and China.
In conclusion, the online food delivery market in India is set for substantial growth, driven by increasing urbanisation, rising incomes and changing consumer behaviours. As the market evolves, both established players and new entrants will find ample opportunities to thrive.
