India’s Online Food Delivery Market To Surge 3.2X To INR 2.12 Lakh Cr By 2030: Swiggy Report

The country’s food delivery market is expected to more than triple to INR 2.12 Lakh Cr by 2030, according to a report released by Swiggy in partnership with Bain & Company.

The report, titled ‘How India Eats’, estimated that the country’s food delivery industry will clock a compounded annual growth rate (CAGR) of 18% till 2030 to reach this size from INR 66,000 Cr in 2023.

Further, market penetration is expected to increase from the current 12% to around 20%. 

At a broader level, the Indian food services market, currently valued at INR 5.5 Lakh Cr, is expected to grow at about 12% CAGR till 2030 to reach INR 9-10 Lakh Cr mark by 2030. 

This growth is expected to come on the back of expanding customer base, growing consumption occasions, and a rise in supply, as per the report. These trends will also aid in the growth of the online food delivery market.

The fledgling online food delivery industry is largely a duopoly, with Zomato and Swiggy accounting for a majority share. 

A recent report by brokerage firm Goldman Sachs estimated that Swiggy’s competitor Zomato now likely holds a 56-57% market share in the food delivery market. The estimate was drawn on the basis of Prosus’ 2024 annual report, according to which, IPO-bound Swiggy saw a 26% year-on-year (YoY) increase in its gross order value (GOV) in 2023. The GOV for the foodtech decacorn’s food delivery business grew in “double digits”, it said.

Acknowledging “decent” growth in the food delivery segment over the past year, Swiggy food marketplace’s CEO Rohit Kapoor said that the company aims to continue on the growth trajectory in the near future.

To achieve this, the company would continue to launch new offerings, Kapoor told Inc42.

As part of this, Swiggy recently reintroduced its homestyle meal delivery service, Swiggy Daily, four years after taking it off the menu. Kapoor said that the Daily vertical has been seeing good traction since its launch. 

Besides, Kapoor said Swiggy also expanded its discount service ‘Pockethero’ last month and introduced ‘Reorder’ and Swiggy Explorer features. Another feature is also set to launch shortly. 

“These offerings were just in the last month. There’s another feature coming this week. In total, we have five solid new offerings rolling out to consumers in the last 30 days. That’s the pace of new offerings we’re bringing, and I don’t see it slowing down,” he said. 

Speaking about the report’s findings, he said they are based on the top 50 most populous Indian cities. These cities cumulatively hold 70% consumption in the online food delivery business.

Kapoor said that a majority of food delivery revenue for Swiggy currently comes from these 50 cities. However, he expects this situation to change going ahead. 

“Geographically, municipal limits can end but consumers don’t think like that. The road connectivity is increasing, and people from smaller cities come to larger ones for shopping and dining. With the gap reducing, consumption patterns are also set to change,” he said. 

The report comes at a time when competition in the Indian food delivery market is expected to get more heated. Earlier this year, Tata Digital’s super app Tata Neu was said to be in talks with ONDC to enter the food delivery market. Flipkart and Ola are also said to be looking to enter the space. 

However, Kapoor is unfazed by this as he believes that the market can accommodate new players. “We are in a place where the category is growing… We are a young population, with 10 Cr consumers set to come in. I get very excited about the data points I am seeing from the report.”