Despite rapid growth, the segment remains a small share of total food services, pointing to significant expansion potential
India’s online food delivery segment, despite expanding quickly in recent years, still contributes only about 11 per cent to the country’s overall food services industry, signalling considerable scope for future growth, according to an Investec Equities report.
The analysis pointed out that this segment’s share has climbed from nearly 3 per cent in 2018 to around 11 per cent now. While this rise reflects strong consumer uptake, it also highlights a large untapped opportunity, particularly with the continued expansion of organised food services.
It stated “online food delivery still represents only 11 per cent of total food services, up from 3 per cent in 2018, indicating significant headroom for further penetration.” The segment has become the fastest-expanding category within India’s broader food services landscape.
In terms of market size, the segment grew from USD 1.4 billion in 2018 to USD 9.1 billion by 2024, marking a compound annual growth rate (CAGR) of roughly 37 per cent. Looking ahead, it is projected to reach about USD 27 billion by 2030, growing at an estimated CAGR of around 19 per cent. In rupee terms, the market increased from Rs 270 billion in FY20 to Rs 790 billion in FY25 and is expected to rise further to Rs 1.7–2.2 trillion by FY30, implying a CAGR in the range of 17–23 per cent.
The report attributed this expansion to both demand-side and supply-side drivers. On the demand front, increasing urbanisation, tighter schedules, and the rise of nuclear families, along with a younger workforce are encouraging more consumers to order food online. Convenience-focused consumption patterns are also supporting demand for delivery platforms.
It further noted that digital adoption has been a major enabler. Higher smartphone usage and smoother digital payment systems have made ordering more convenient and widely accessible. On the supply side, improvements in the organised restaurant sector, growth of cloud kitchens, and stronger logistics infrastructure have enhanced service efficiency and reduced delivery timelines.
These factors have improved user experience and driven repeat orders. The report added that if these trends continue, the penetration of online food delivery within the overall food services sector is likely to increase further.
While the industry has already recorded strong growth, its relatively modest share of the total market indicates substantial room for expansion as digital penetration deepens and organised food services continue to scale.
