Why It’s Time To Take Notice Of India’s Evolving Food Service Market

Why It’s Time To Take Notice Of India’s Evolving Food Service Market


The food ordering market of India is expanding at a CAGR of 16% to reach 17 Bn by 2023

Swiggy has the most satisfied customer base with 66% positive reviews overall

In southern India, Zomato lead the market when it comes to food quality

India’s foodtech industry has changed so dramatically over the past 3-4 years that paper menus have become relics of the past in no time. With the emergence of hundreds of startups with a singular goal of taking traditional restaurant businesses online and making everything food just a few taps away. 

A young working population lapped up food delivery services with great appetite. The tech-savvy millennial audience has been more experimental than the past generations when it comes to going for new food experiences. But the comfort of having food delivered to the doorstep has impacted dining out too. 

Not only is this driving the growth of the food services market, but it has also upended the restaurant businesses. The overall impact of the market on the entire ecosystem is significant: it extends from real estate to agriculture to kitchen equipment to supply chain as well as employment.

The online food ordering market is estimated to expand at a CAGR of 16.2% to reach $17.02 Bn by 2023.

With rising investor interest — $3 Bn worth of funding received between 2014 and 2019 (till June) — and players such as UberEats, Amazon and Ola Foods entering the market, the sector has been a sunrise sector in the Indian context.


However, with most startups in the food delivery space riding on high discounts and low commision model, long-term profitability becomes a challenge. The entry of more players in the market makes acquisition and retention of customers more competitive and expensive as revealed in DataLabs By Inc42’s latest “Changing Landscape of Food Delivery Service In India 2019” report.



However, despite more than 3000+ active companies, online food delivery in India is characterised by a duopoly, with Zomato and Swiggy together fulfilling more than 90% of all orders.

In our analysis, it is clear that customer satisfaction is the key to success for food delivery startups, and it’s not just about the service or the quality of food but rather about a 360-degree creation of value around the customer. DataLabs by Inc42 collated close to 20K customer comments from the Google Play Store, and other review websites to understand how customers are perceiving these services. It also helped us index the most-used delivery services in the country.

Which Food Delivery Startup Has Won Over Consumers?

  • Swiggy has the most-satisfied customer base with 66% positive reviews
  • Freshmenu has the most dissatisfied customers compared to rivals
  • Zomato and Domino’s have 50% positive reviews and less than 6% negative

In order to understand customer trends in Indian market in the food delivery space, DataLabs by Inc42 partnered with the customer insights platform — Clootrack. We went through 44k customer conversations from various social media posts, blocks and app reviews. We found that customer satisfaction is evaluate through — food quality, customer experience, customer service, refunds, loyalty and timely delivery.

This helped us to further understand how different approaches are being adopted by old players like Domino’s and Pizza Hut and startups and newer brands such as Zomato, Swiggy. Faasos, Freshmenu and so on.

While the newer players have scored higher in terms of food quality and customer experience, there is no significant difference in scores between the two sets in terms of customer care, refunds and timely delivery.

The relatively older brands such as Domino’s and Pizza Hut have scored higher in comparison to the new players in terms of promo codes, order confirmation and zero cancelation fee — the primary concerns for the customers in Tier 2 cities. Understandably, Dominos and Pizza Hut has higher penetration beyond Tier 1 cities or metros.

The report “Changing Landscape of Food Delivery Service In India 2019” explores this evolving food delivery landscape and the various business models as well as funding trends, investors and exits. Further, there’s a deep analysis of current and upcoming trends in customer behaviour in the food delivery and food services space.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

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