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Key Points

India's food delivery market is projected to grow at 17-22% CAGR, reaching Rs 1,700B by 2028. Quick commerce is expanding even faster with over 60% CAGR, led by Blinkit. Swiggy remains dominant in food delivery but faces supply-side challenges. Growth is fueled by digital adoption and expansion into smaller cities.

Key Points: India Food Delivery and Quick Commerce to Grow 17-22% CAGR

  • Food delivery to hit Rs 1,700B by 2028
  • Quick commerce CAGR over 60%
  • Swiggy and Blinkit lead segments
  • Tier 2-3 cities driving expansion
3 min read

India's food delivery and Quick Commerce to sustain growth of 17-22% CAGR: Report

Nirmal Bang report predicts 17-22% CAGR for India's food delivery and 60%+ for quick commerce by 2028, led by Swiggy and Blinkit.

"India's Food Delivery & QC to Sustain Growth - Nirmal Bang Report"

New Delhi, July 23

Despite challenges, India's food delivery and quick commerce (QC) sectors are expected to maintain strong growth momentum in the coming years, according to a report by Nirmal Bang.

The report highlighted that the food delivery market in the country is expected to grow at a compound annual growth rate (CAGR) of 17-22 per cent between 2023 and 2028.

Meanwhile, the quick commerce segment is likely to expand even faster, with a projected CAGR of over 60 per cent during the same period.

It stated that "India's Food Delivery & QC to Sustain Growth".

The report stated that platforms such as Swiggy and Eternal are expected to continue leading the food delivery segment. On the demand side, factors like customer preference for platforms and assortment variety are working in favour of these incumbents.

These factors are likely to support their leadership position, even though some vulnerabilities remain on the supply side.

While there has been innovation around product assortment and faster delivery, the report noted that affordability still has room for improvement, though discounting is not the main focus.

In the quick commerce segment, the report stated that Eternal's Blinkit is currently ahead in both scale and profitability. Swiggy is still catching up, but recent investments in dark stores and improved customer targeting could help it achieve positive contribution profit as a percentage of Gross Order Value (GOV) by FY27.

Better client acquisition and faster customer spending compared to earlier phases are also seen as promising signs for Swiggy.

The report values the Indian online food delivery market at approximately Rs 630 billion (USD 7.3 billion) in 2023 and expects it to grow to Rs 1,400-1,700 billion (USD 17-21 billion) by 2028.

Similarly, the quick commerce market, focused on ultra-fast delivery of daily essentials, is forecasted to grow sharply from Rs 224 billion (USD 2.8 billion) in 2023 to Rs 2.3-4.2 trillion (USD 29-53 billion) by 2028. The near-term annual growth rate is expected to be 80-100 per cent.

This rapid growth is being driven by increasing digital usage, higher consumption frequency, and wider expansion into Tier 2 and Tier 3 cities. Platforms like Swiggy (Food Delivery, Instamart, Dineout) and Eternal (Food Delivery, Blinkit, District) are turning into multi-vertical ecosystems, meeting consumer needs both at home and outside.

Even in a slowing overall demand environment, platform-based models across food delivery, quick commerce, and dining out are proving to be strong structural growth drivers with long-term potential, the report concluded.

- ANI

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Reader Comments

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Priya S
As a homemaker in Jaipur, quick commerce has been a game-changer! Getting groceries in 10 minutes is unbelievable. But prices are still higher than local markets. Hope competition brings them down soon.
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Arjun K
The report misses mentioning how these platforms treat delivery partners. The growth is great but at what cost? Many riders work 12+ hours daily with minimal benefits. Companies should share profits with them too.
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Sarah B
Interesting to see Indian quick commerce growing faster than global counterparts! The 10-minute delivery model wouldn't work in many Western cities. Shows how India is leapfrogging in digital adoption.
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Karthik V
Tier 2 cities are the real growth drivers! In my hometown Indore, food delivery orders have doubled in last year. But quality control needs improvement - too many restaurants with fake ratings.
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Nisha Z
While convenient, we're losing our local kirana store culture. These small shops can't compete with deep discounts. Hope the government brings some policy to protect traditional retailers too.
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Michael C
The unit economics still don't make sense to me. How can 10-minute delivery be profitable with such thin margins? Either prices will rise or quality will suffer in long run. Bubble waiting to burst?

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