Surge in transactions to drive growth of Indian foodservice market
The sector is forecast to be worth US$32bn by 2023.
The foodservice profit sector in India is forecast to grow from INR10.3 trillion (US$23.7bn) in 2018 to INR15.9 trillion (US$32bn) by 2023, registering a compound annual growth rate (CAGR) of 9.0%.
A new report from data and analytics company GlobalData suggested that this was driven by a large young population, growing economy and rising disposable income.
Pubs, clubs and bars were the largest foodservice profit sector channel by value in 2018, followed by quick service restaurants (QSR), and full service Restaurants (FSR).
“With increasing number of young professionals and dual income households, Indian consumers are short on time and are inclined to eat outside or order online,” GlobalData consumer analyst Tanumoy Chattopadhyay explained.
The report noted that all the channels registered “sizable” growth from 2016 to 2018, and are forecast to continue growing at positive CAGRs between 2018 and 2023.
FSRs and QSRs led the profit sector in revenue terms through 2016 to 2018, posting CAGRs of 12.3% and 11.7%, respectively. Both channels are said to have benefitted from consumer’s rising disposable income, which resulted in consumers trading up from mobile operators and street vendors to QSRs and FSRs.
The report also indicates that the growth in the profit sector is expected to come mostly from increasing transactions number over transaction value, with consumers “seeking new experiences and looking for new food items.” The number of transactions is forecast to grow at a CAGR of 5.4% during 2018-2023.
Meanwhile, outlet growth is forecast to remain “comparatively weak”, increasing at a CAGR of 4.2% during the same period.
The report also said that independent operators and dine-in transactions contribute to majority of revenues in all major channels, although revenue generated by chain operators and takeaway transactions is forecast to grow at a faster rate by 2023. This is said to “reflect a shift towards both consolidation and an increased focus on convenience” in the market.
“Foodservice market in India will continue to benefit from (the) country's rapidly growing urban population and evolving consumer lifestyles. Moreover, with benefits like time saving and convenience as well as influx of various apps and websites, online food ordering, online payments, self-ordering kiosk and online table reservation will continue to increase, improving every aspect of service, including speed and quality,” Tanumoy concluded.
