India's Food Delivery and Quick Commerce to Grow at 17–22% CAGR Till 2028: Report

India's food delivery and quick commerce (QC) sectors are projected for robust growth. Food delivery is estimated to grow at a 17-22% CAGR between 2023 and 2028, reaching USD 17-21 billion.

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.