Rising online food appetite in low tier Indian cities rings restaurant coffers

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The 15th edition of the two-day India Food Forum received overwhelming response with several food products being launched along with active participation from retailers and food brands.

Mumbai: India’s online food penetration is seen growing as low tier cities have joined the gastronomic evolution with increased internet penetration along with more restaurants coming on board of delivery apps.

“At the start of the year, the top six Indian cities were unit economics profitable. However, by the end of year, top 15-20 towns contributing to over 70% of the market looks profitable,” said Nishant Shekhar, Managing Director & Partner, Boston Consulting Group on the second day of India Food Forum.

Over 200,000 restaurants out of the 60 lakh restaurants are now on board of delivery apps in India and they are also contributing to a large percentage of advertising revenues, he said.

Sharing a data point, Shekhar pointed out that online food user’s value increases with the digital age with over 5 years old users ordering 12-14 times more than a new user. Online food delivery is following the trajectory of online commerce which has already expanded into low tiers Indian cities, he said.

The 15th edition of the two-day India Food Forum received overwhelming response with several food products being launched along with active participation from retailers and food
brands.

An extensive deliberation over the past two-days by industry barons both from the retail and brands called upon the need for the formalisation of the food sector.

Experts pointed out that while India’s agriculture exports doubled to USD 60 billion in 2022 from USD 30 billion in 2018, the retail food business remains 90% unorganised.

Earlier on Day 1 of the Forum, India’s online supermarket Big Basket’s official said it will partner with a Demand Side platform (DSP) in the next few months.

“Our tie-up with DSP partner will allow brands to advertise on the open internet and reach out to high intent, relevant Big Basket audiences as also measure the effectiveness,” said Kishore Kumar, Head – Intelligence, Big Basket.

So far among the online retailers, Amazon has a DSP that allows advertisers to buy video and display ads at scale, using programmatic ad purchasing and harnessing the power of shoppers.