The food delivery business in India is quickly establishing itself as a lucrative sector. According to Statista, this industry raked in over $7.73 billion by the end of October 2019. Pundits forecast that this sector will experience a CAGR of 12.8% and revenues will expand to $12.53 billion by the end of 2023.
Already, companies like Swiggy, UberEats, Zomato, and more are leading the trends in the scene. But, the overwhelming popularity and potential of this segment have attracted a few big players who are not endemic to the sector. Not very long ago, the e-commerce giant, Flipkart has revealed its plans to enter this space with an exclusive food delivery line.
In October, Flipkart registered its initiative known as Flipkart Farmermart with its modus operandi being a “farm-to-table” one. This means that we can expect a multitude of services that range from agricultural produce to piping hot dishes.
Moreover, Flipkart displayed its seriousness towards the new venture by allocating a budget of INR 2500 crores ($347 million). This fund will be used for making strategic strides in the progressively competitive market.
However, Flipkart’s not the only one eyeing this segment. It’s rival, Amazon has already pledged over $500 million towards setting up a food delivery service as well as a cloud kitchen line. There are also reports that Amazon is actively wooing restaurant businesses away from existing players such as Zomato and Swiggy. It is doing so by offering to take a lower cut from the restaurant’s earnings.
On average, the online food delivery sector in India clocks in over 12 million orders per month. Moreover, this business segment is set to grow two-fold over the next couple of years. Interestingly, when compared to other e-commerce platforms, food delivery aggregators see customers return at a much higher frequency.
But, what is driving this growth in the Indian online food delivery sector? Why are more and more companies finding this line of business attractive? And, why are investors ready to bet big on this segment? Here are a few reasons,
The proliferation of the Internet and smartphones:
Smartphones have been present in the Indian market since the start of this decade, and their prices have been decreasing with every passing year. Moreover, internet data charges in the country have dropped drastically since 2016.
The combination of the two factors propelled India as the country with the second-largest number of internet users, with 455 million active users. Easy access to the Internet also paved the way for digital payments and improved e-commerce overall.
Changing work and lifestyle patterns:
Today’s Indian society is vastly different from what it was a couple of years ago. For a start, the work shifts are now flexible and now extend into overtime. Moreover, with rentals in urban areas increasing, many people in the workforce choose to live in the periphery. It is reported on an average, Indians spend more than 7% of their day in commute. Another factor is the change in gender roles as more and more women are joining the workforce.
These factors make it significantly difficult for individuals to cook food at home. This establishes online food delivery applications as attractive options. One study by FICCI and Technopak revealed that 60% of millennials tend to order food more than once a month.
Food is fundamental to human survival
To humans, food has physiological importance as it is critical to our survival. Thus, it is guaranteed to have a high and perpetual economic demand.
The above factors prove that the food delivery sector is peaking in India, and the testament to this is Flipkart’s recent foray into the segment. Budding entrepreneurs can also instantly enter this industry using a UberEats like app. It is very easy to build an application using robust and scalable solutions offered by AppDupe. We are a leading app development company and can help you to launch your application within a short timeframe.
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