According to a report by Google and Boston Consulting Group (BCG), rapid digitization and growth in both online buyer base and spending will help India's online food industry to become an $8 billion market by 2022, growing at a CAGR of 25-30 percent.
Rachit Mathur, managing director, and partner, India lead, consumer and retail practice, BCG said that “Overall online spending in India is rising rapidly and expected to grow at 25% in the next five years to reach over $130 billion".
Food tech start-ups have transformed the way Indians eat. Ordering food online is now a habit. There is a large headroom to increase reach, engagement and usage frequency for food tech apps," said Abheek Singhi, Senior Partner and Managing Director at Boston Consulting Group.
Roma Datta Chobey, Director-Travel, BFSI, Classifieds, Gaming, Telco & Payments, Google stated that “Food tech has now made its presence in greater than 500 cities in India and with the growing confidence of the consumer, there are new opportunities for the players to win with the consumer in a growing market”.
The rapid digitization and steadily growing consumption has grown the food-tech firm six times over the last couple of years and these will continue to increase, he said.
In India, the online food delivery market currently control by Zomato and Swiggy.
Zomato announced that it has acquired Uber's Food Delivery Business in India in an all-stock deal of nearly $350 million and Uber will have a 9.99 percent stake in the Deepinder Goyal-led food delivery platform.
“Higher-order frequency though offset by lower average order value," the report said.
The ordering frequency is expected to grow by 18-20%, however, average order values may soften by 5-10% as consumers try small portions but order more.