Indian online food delivery grows by 150% in volumes in 2016

The online food delivery business in India grew by 150% year-on-year (YoY) in terms of order volumes in 2016 with an estimated gross merchandising value (GMV) of $300 million. This is despite the industry experiencing many roadblocks during the year which led to many players scaling down operations or shutting down their operations in certain places. Even investment in this segment slowed to below $80 million in 2016 from $500 million a year prior.

Source: RedSeer Consulting

The online food delivery for partner restaurants has now reached to 30-35% of their total business and seems to be growing rapidly, according to a RedSeer Consulting report. It added that more than 80% of the orders come from the top 5 cities from the over 20 cities where online food delivery is available.

The tough environment has meant that the established players are focusing on achieving operational efficiencies and profitability in the cities and have limited their expansion to newer markets.

Anil Kumar, Founder and CEO, RedSeer Consulting said, “With customers and restaurants both embracing these online food delivery services, the order volumes have shown a healthy growth but the fundamental issue of unit profitability and operational efficiencies need to addressed to build a sustainable business in this sector”