The Indian Food-tech industry grew at 150% in order volumes in 2016

The Indian Online Food Delivery industry experienced many roadblocks in its growth story in 2016 with multiple players scaling down their operations or shutting shop.

This was also visible in low investor sentiment wherein the industry saw a total funding of less than USD 80 million in 2016 against USD 500 million same period year before.

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Even in this scenario, the industry (aggregators and internet kitchens together) grew at 150% rate y-o-y last year with an estimated GMV of USD 300 million in 2016, according to a report by RedSeer Management Consulting.

For Restaurants, the online platforms have helped them increase their reach and this additional business source has improved their resource utilization.

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Customer Behavior

Customers have started to opt for the multiple choices offered by online platforms in place of ordering food by calling individual restaurants. This was confirmed in our study wherein, the share of online food delivery for partner restaurants (restaurants associated with online delivery platforms) covered in the study has reached to 30-35% of their total business and these numbers seems to be growing rapidly by the day.

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Industry Size

With more than 80% of orders coming in from Top 5 cities (out of 20+ cities where online food delivery is active), the established players are focusing on achieving operational efficiencies and profitability in these cities and have limited their expansion to newer markets. Internet kitchens with their niche offerings have come up in key cities during the period.

Image Credits: Twigly