The online food delivery ecosystem has changed a lot over the last decade. The food ordering platforms have now become an integral part of the Indian households. With the rising demand of the digital economy, the online food ordering platforms are aggressively expanding their footfall to tier 2 & tier 3 cities.  

According to a study conducted by Redseer Strategy, ‘India’s food services market is expected to double in 2030 by $152 billion from the existing $80 billion’. Now that’s a huge impressive number. 

The food delivery growth in india has not just accelerated in the urban cities but has penetrated into suburbs and towns. It is observed that the tier 2 & 3 cities are now becoming the next frontier for the food delivery platforms. From smaller towns to emerging urban centers, the food delivery platforms are seeking new strategies to explore tier 2 tier 3 food delivery services. As leading tier I metro cities, Mumbai, Delhi, Kolkata, Bengaluru have become a saturated marketplace. 

Factors Responsible for the Shift 

The tier 2 & tier 3 cities have an immense potential of consumer demand that is why the food ordering platforms are mapping down the untapped markets. Slowly, the suburbs are becoming powerful powerhouses of consumption driven by shift in disposable income, change in consumption pattern and increase in internet penetration.

• Digital Penetration

The increased penetration of smartphones and the internet have provided a robust boom to the food ordering platforms. With low cost access to the internet, app based companies are able to cater beyond mainstream metro cities.

• Adoption of new appetites 

The younger consumers in the small towns and cities are more aspirational and trying to pace up lifestyles, food habits and taste & preferences. Exploration of non-conventional cuisines are boosting the online food ordering platforms to set up services for the growing demand.

• Low Operational Cost

As compared to tier 1 metro cities, the logistics costs are low in suburbs and towns. Similarly, there are affordable manpower services and low marketing costs. 

• Rising Disposable Incomes

The tier 2 & tier 3 cities are experiencing rising spending capacity, especially in younger adults and students. The middle-class are seen with an increased capacity of disposable incomes due to employment growth and shift in lifestyle patterns. 

• Optimising Local Restaurants

In tier 2 & tier 3 cities the local based restaurants are getting untapped by online food ordering platforms. Menu of local restaurants are keeping a wider range of food items that are delectable and tempting at the same time. On-boarding of these restaurants in food ordering applications are providing consumers diversified options at reasonable rates. 

Future Prospects for Tier 2 & 3 Cities

The food delivery growth in india has enormous prospects for tier 2 & 3 cities. Tier 2 & 3 cities like Agra, Bhopal, Chandigarh, Lucknow, Cuttack and Kolhapur are some of the expanding cities where food ordering platforms are tapping and expecting a larger turnover of revenues. Due to huge penetration of social media, purchasing power and exploration of localised food options, the online food ordering platforms are leveraging its footfall and connectivity across these cities. 

In this case, both the consumers and restaurant owners including many cloud kitchens and small scale eateries are getting exposed to a larger interface. Affordable deals, prices and modern menu are the core areas for scaling up the food ordering platforms. 

Conclusion

Tier II & III cities are no longer secondary markets. With faster adoption, improving purchasing power, and scalable operations, they are positioned to become primary revenue drivers for food ordering platforms in India. Tier II & Tier III cities are no longer emerging markets; they are becoming core pillars of India’s food ordering ecosystem, shaping the next wave of expansion and profitability.