It's Boom Time For Online Food Business!

by CXOtoday News Desk    Apr 03, 2014

online food

High Internet penetration, rise in the adoption of smartphone and a general economic downturn are driving the online food industry. Food portals in India have witnessed over 150% growth in orders last year, according to recent reports.

Today there are a plethora of players operating in the industry, such as,,, to name a few. Experts believe with a greater usage of the internet, mobile phones as well as the ongoing economic slowdown that prompted people from dining out have all contributed to the growth of online food outlets to start delivery options. Many consumers are also ordering over the phone.

These sites feature location-specific listing of restaurants where consumers can check out menus and place orders. Most of them also offer attractive discounts and freebies. Besides, there are sites carrying online reviews which enable consumers to compare to choose which site and food would suit their taste.

Ritesh Dwivedy, founder of for example, told Business Line in a recent interview that the market is shifting towards mobile and web. “Today there is also an availability of more payment options have boosted the e-commerce industry,” he said.

The report notes that while mobile orders for have gone up from only 3% in 2012 to 30% last year. Even online food sites like and has witnessed a 60-70% increase in mobile orders every month. Experts believe that the mobile to web orders will be at 50:50 by 2015.

Read: Top Trends That Will Drive E-Commerce in 2014

Traffic congestion and high tax on fine dining are the other reasons for the high growth rate of the online food delivery market in India. The report estimates that the business, which stood at Rs1,000 Crore in 2012, is set to touch Rs 6,000 Crore by 2017. for example is targeting to capture 8-10% of that market by 2017, as the company believes that with the rise in usage of smartphones among Indian consumers, more people are finding online ordering via mobile and apps more easy and convenient.

The other noticeable trend is that online ordering of food in smaller towns is also picking up owing to the rising food inflation. Moreover, increased taxes and real-estate costs in metros have forced quick service restaurants to enter small towns.

Online food owners believe that restaurants are witnessing growth stagnation in metros where there is a plethora of choices. But in small towns, while people have more disposable incomes, there is a lack of choice. So, more online food sites are gearing up to cater to tier-2 and tier-3 cities, and the trend will continue to rise in the next 2-3 years, says the report.