Online Food Delivery in India Represents Untapped Market, Constituting 11% of Total Food Services: Report

Despite the rapid expansion of online food delivery services in India over recent years, the sector still represents a modest 11% of the overall food services market. This figure, while up from approximately 3% in 2018, signals a substantial untapped market and considerable room for future growth, according to a report by Investec Equities.

The report highlights that the online food delivery segment has emerged as the fastest-growing component within India's expansive food services industry. The market's valuation has surged from USD 1.4 billion in 2018 to USD 9.1 billion in 2024, demonstrating a remarkable compound annual growth rate (CAGR) of around 37%. Projections indicate continued strong performance, with the market expected to reach approximately USD 27 billion by 2030, maintaining a projected CAGR of about 19%.

This impressive growth trajectory is attributed to a confluence of demand-side and supply-side factors. On the demand side, increasing urbanization, busier lifestyles, the rise of nuclear families, and a growing young working population are collectively driving a preference for the convenience of ordering food online. Simultaneously, widespread smartphone penetration and the availability of seamless digital payment infrastructure have made online ordering more accessible and user-friendly for a vast number of consumers.

From the supply side, enhancements in the organized restaurant sector, the proliferation of cloud kitchens, and strengthened logistics networks have led to improved service reliability and reduced delivery times. These improvements have collectively boosted customer satisfaction and encouraged repeat business. As these trends persist, the online food delivery segment is poised for even greater penetration into the broader food services market, indicating significant future expansion potential as digital adoption deepens and the organized food services landscape continues to evolve.