Indian online catering has plenty of room to grow
And the future looks only brighter, according to a recent report.
Online food service penetration in India is expected to double by 2025 – with a gross merchandise value of nearly $ 13 billion, management consultancy firm RedSeer Consulting said in a report dated Aug. 30. GMV is the total value of goods sold over a specified period of time before any fees or expenses are deducted. It is a key performance indicator for online businesses.
“Although the market has been affected by the pandemic, it has also accelerated the pace of online adoption,” RedSeer’s Rohan Agarwal and Abhijeet Routray said in the report. “Similar to many other markets, this market is also experiencing increasing online growth, particularly after the pandemic, and is growing in importance in the overall market share.”
(Graphics: Rahul Awasthi / ETtech)
On Thursday, Rebel Foods became the first cloud kitchen to enter the Indian unicorn club after raising $ 175 million in a funding round led by Qatar Investment Authority (QIA) with participation from existing investors Coatue and Evolvence India . The operator of food brands Faasos and Behrouz Biryani has said it is heading for an initial public offering in the next 18 to 24 months.
ALSO READ THE TECH NEWSLETTER OF THE DAY
Just when you thought the year couldn’t be crazier, three startups have joined the billion dollar club on consecutive days in an already frenzied October, bringing the number of unicorns created this year to 31 and it continues.
Almost three months ago Ltd. was listed on the Indian stock exchanges with a premium of more than 50% on its issue price, a week after its IPO was subscribed more than 35 times. In response, his main rival Swiggy raised $ 1.25 billion from Japanese firm SoftBank Group Corp. and others for a valuation of $ 5 billion. It is currently in talks to raise $ 500 million to $ 600 million in a funding round that would double its valuation to $ 10 billion, ET reported on September 28.
Yet while million dollar fundraisers, unicorns, and initial public offerings are welcome, India’s online food industry still has a long way to go, as the market remains severely under-penetrated by compared to the United States and China. In 2019, Indians spent $ 7.01 billion on online food services and $ 90.29 billion on home-cooked meals, according to the RedSeer report. The comparison was not as striking in the case of the United States and China, as the chart below shows. This leaves a lot of room for online catering services to grow.
In the food delivery space, stand-alone restaurants dominate the market. It also represents an important opportunity for online food delivery platforms to consolidate the offer on their platforms, like what happened in China.
“India is expected to be the third largest consumer market by 2030, which will be a major boost for the overall consumer economy,” according to the RedSeer report. The adoption of digital services by small towns and the branded food service ecosystem will drive the growth of online food delivery, he added.