Growth to be driven by rising order frequency, tier-2 expansion and higher average order values, says Investec Equities report
India’s online food delivery market is set for strong expansion, with its size expected to grow from USD 9.1 billion in 2024 to nearly USD 27 billion by 2030, reflecting a compounded annual growth rate (CAGR) of 19 per cent, according to a report by Investec Equities. The projected growth is being driven less by new user additions and more by higher ordering frequency, deeper penetration in tier-2 and smaller cities, and a steady rise in average order values (AOV).
The broader food services industry has also seen significant growth, increasing from Rs 4 trillion in FY20 to Rs 7 trillion in FY25, and is forecast to reach Rs 11–12 trillion by FY30, implying an annual growth rate of 11–12 per cent. However, overall penetration remains modest at around 13 per cent of total food consumption, far below levels seen in the United States (58–62 per cent) and China (42–46 per cent). This gap highlights India’s continued reliance on home-cooked meals, although trends such as urbanisation, smaller family units, and longer working hours are gradually shifting consumption behaviour towards eating out and ordering in.
Within the sector, the organised segment is gaining ground, with its share rising from 36–41 per cent in FY20 to an estimated 47–52 per cent in FY25. It is expected to further expand to 60–65 per cent by FY30. In value terms, the organised market—currently estimated at Rs 3.2–3.5 trillion, is projected to nearly double to Rs 6.6–7.8 trillion over the same period, supported by the growth of branded restaurant chains, cloud kitchens, and delivery-focused formats.
Online food delivery continues to be the fastest-growing component of this ecosystem. The segment has expanded from Rs 270 billion in FY20 to Rs 790 billion in FY25 and is expected to reach between Rs 1.7 trillion and Rs 2.2 trillion by FY30, growing at a CAGR of 17–23 per cent. Its share in the overall food services market has also increased sharply, from just 3 per cent in 2018 to about 11 per cent at present.
User engagement metrics indicate further headroom for growth. The report estimates 85 million annual transacting users (ATUs) in 2024, of which 27 per cent, or about 23 million, are monthly active users (MTUs). This conversion rate is expected to improve to 32 per cent by 2029, with the total user base projected to reach 137 million as digital adoption deepens.
Geographically, metro and tier 1 cities still dominate, contributing 75–80 per cent of gross order value (GOV). However, tier 2 and smaller cities already account for 20–25 per cent, signalling widening market reach. Ordering frequency in India currently stands at three to five orders per month, compared to eight to 10 in the US and five to 10 in China, suggesting significant upside as convenience and accessibility improve.
Average order values are also trending upward. Platforms such as Zomato and Swiggy are expected to see AOVs rise from Rs 282 and Rs 407 respectively in FY22 to around Rs 461–463 by FY26. Industry estimates by Redseer suggest AOV could reach Rs 542 by 2028, supported by premium restaurant offerings and a broader range of cuisines.
With formalisation accelerating and consumption patterns evolving, the report underscores a long growth runway for organised, delivery-led platforms, positioning India as one of the most promising food delivery markets globally.
