How many times do your eat at home? Or what is the online order frequency when you are tired cooking at home after a busy schedule at work? The answer is at least 3-4 times a week by an average millennial that is placing order online. This trend is not only driven by an ease of getting food but also the various option that is available in the market. That’s where we have seen the rise of food-tech players and app in the fast evolving Indian food market.
“We expect the industry to grow to $7.5-$8Bn at 25-30 per cent CAGR over the next three years, will require wider adoption & continued usage,” shared BCG-Google Report.
Within e-Commerce sector, food-tech industry has grown leaps and bounds in last five years. And, it remains the fastest growing segment despite being very nascent at this age in the country. “Reach of food-tech app has grown six times from 2017 to 2019,” shared BCG- Google report. Not just reach, the engagement has doubled for food-tech apps, the report further mentioned.
Here are top three key growth drivers shaping the food tech space in the Indian market:
Increase in internet and online buyer base: Over the years we have seen a sudden rise in the internet penetration across rural and urban areas which are growing at a CAGR of more than 20 per cent. Not only this, Indian online buyers base is expected to grow exponentially at a CAGR of more than 12 per cent, shared the report.
Higher order frequency though offset by lower average order value: More and more people are ordering food these days. No matter, whether you are looking for north Indian, south Indian, go-to options or some healthy delicacy according to your need and preferences. Seeing all this growth, ordering frequency is expected to grow by 18-20 per cent even as average order values may soften by 5-10 per cent. More users are moving from occasion based ordering to habitual ordering on a regular basis.
Expanding reach within India: Large food-tech players are now present in 500+ cities in India and aggressively expanding operations in all present cities. Zomato, Swiggy and Faasos have expanded themselves to even tier-3 cities and have partnered with local restaurants and hotels to deliver food at the convenience of home. Improving network of restaurants across India has augmented growth of Food tech in new areas and also its reach to even smaller towns and cities.