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January 4, 2018

top 5 indian cities for online food ordering

The Top 5 cities in India contribute to over 85% of the online food ordering market in India. In terms of order  volume  Bangalore is leading the way with 32%,with NCR a close second with 20%. Mumbai and Hyderabad follows with 14% and 12%.Pune takes the 5th spot with 10%.

The Restaurant industry is estimated to be USD 56 Billion and the delivery industry is pegged at USD 15 Billion Casual Dining (44%) dominates the organised segment while QSR(quick service restaurants) is one of the fastest growing segment.

According to the latest data from Redseer consulting provides some interesting insights on the  indian online food delivery market  Online food delivery grew at a staggering pace of 150% to reach USD 300 Million in Gross Merchandising Volumes. 

On an average Online food delivery players handled 1,60,000 orders in a day with and average order value of $5.Online Food Delivery Aggregators dominate the market with 70% market share, and have a reach in 20+ cities while internet kitchens with their niche offerings are limited to 4-5 major cities.

In terms of revenue models,among the major source of revenue for aggregators is the commission that they charge their partner restaurant (13%-23% of average order value) while Internet Kitchens have taken a full stack approach and 100% of the bill value goes to them.

Bangalore, Delhi NCR, Mumbai, Hyderabad and Pune contribute 40% to the GMV(gross merchandising volumes) of Indian e-tailing industry and these cities are the top contributors for other verticals too. 

Among the largest factors  that has enabled the online food ordering has been the large share of young working population with high disposable income and easy access to internet through web/mobile  which has accelerated the growth of online medium in these cities.

Among the top 3 biggest challenges facing the online food ordering start ups in India are

1)High delivery cost coupled with low average order value
2)Low stickiness of the customers to platform and high preference for offers and discounts
3) A diverse population with non-homogenous food preferences.