Tier-2 cities to triple food delivery transactions to 180M by FY26, Redseer says
A Redseer report shows Tier-2 cities driving India's next food delivery wave, with transactions rising from 60M in FY21 to 180M by FY26. Online delivery penetration is set to climb from 11% (FY26) to 18% (FY31) as the food services market grows from $90B to ~$150B by 2030, led by digital-first brands, cloud kitchens and premium beverages.
What happened
Swiggy · Redseer report shows Tier-2 cities driving India food delivery growth, transactions tripling to 180M by FY26. Online delivery share to reach 18% by
Key facts
- Tier-2 transactions 60M (FY21) to 180M (FY26)
- metro transactions 300M (FY21) to 1.06B (FY26)
- delivery share 11% (FY26) to 18% (FY31)
- food services market $90B to ~$150B by 2030
- organised segment CAGR 17-18%
- digital-first brands revenue growth 25-30% FY26
- premium coffee CAGR 15-18% through 2030
Why this matters
The Tier-2 delivery surge favors M&A and partnerships in cloud kitchens, premium beverages and digital-first brands to capture the 60M-to-180M transaction jump.
What to watch
- Quarterly Tier-2 order volume and GOV disclosures from Zomato/Swiggy
- Rider cost and delivery-fee changes in non-metro markets
- Cloud kitchen funding rounds and expansion announcements
- Online penetration data updates vs the 11% FY26 baseline
- Regulatory shifts on gig-worker pay or platform commissions
- Platforms deepen Tier-2 rider and dark-store footprint with localized menus and vernacular apps
- Aggregators push private-label cloud kitchens and premium beverage lines to lift AOV
- Investors rotate capital toward cloud-kitchen and D2C food brands targeting Tier-2 demand
- QSR chains launch delivery-first store formats in emerging cities