Analysis of the pizza delivery market in India
The relevance of research
Home delivery pizza production is becoming an alternative to opening a traditional pizzeria, where significant investments are needed in rent, expensive furniture and equipment, and in creating a stylish restaurant interior. Active demand, the high price of the finished product and the simplicity of packaging only contribute to this.
Purpose of the study
Analyzing the state of the pizza market in India, assessing the market size, analyzing competitors, as well as determining the factors affecting the pizza market in India
Content
Part 1. Overview of the Indian Pizza Delivery Market
1.1. Definition and Characteristics of the Indian Pizza Delivery Market
1.2. Indian Pizza Delivery Market Volume Trend 2017-2021
1.3. Market structure by type of service provided in India
1.4. The structure of the pizza delivery market in the Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2. Competitive Analysis in the Pizza Delivery Market in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3: Pizza Delivery Consumption Analysis
3.1. Estimated consumption of pizza delivery per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast for the development of the pizza delivery market until 2026
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
1.1. Definition and Characteristics of the Indian Pizza Delivery Market
In 2021, Indians began to spend more financial resources on the delivery of ready-made food, including pizza.
Home delivery pizza production is becoming an alternative to opening a traditional pizzeria, where significant investments are needed in rent, expensive furniture and equipment, and in creating a stylish restaurant interior. Active demand, the high price of the finished product and the simplicity of packaging only contribute to this.
In the Indian regions, there are much more opportunities for development than in India. Market saturation is average.
Companies introduce accumulative points systems, exchange them for discounts, hold promotions, draws, but still the main factor that contributes to the development of this business is that delivery is absolutely free for the consumer. Dishes that can be ordered at home cost the same as in an offline restaurant. The only condition for such delivery is the established minimum order amount.
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Aggregators began to cooperate with taxis to deliver orders. If the client is far from the restaurant, the aggregator will assign a driver rather than a foot courier. The service is activated automatically. Thanks to this, restaurateurs were able to increase their coverage area by two to three times.
Diagram 1. Dynamics of the pizza delivery market, 2017–2021, billion rubles.
After the removal of all restrictions, most customers continued to actively use the delivery service, as they appreciated its convenience. Thus, covid-19 has brought positive changes to the delivery industry.
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1.3. Market structure by type of service provided in India
There are three ways to provide pizza delivery services in India.
The first way — online ordering and delivery of pizza directly by pizzerias is about …% on the market.
The second is aggregator sites that present menus and prices of various cafes and restaurants to the end consumer, take orders, and the largest of the aggregators have already begun to deliver them in bulk. Similar IT companies have appeared just recently, but have almost completely captured the market.
In India today there are two largest food aggregators - Delivery Club and Yandex.Food. The decrease in promotions and discounts from food delivery aggregators reduced the share of orders through aggregators by the end of 2021 to …%.
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Chart 2. Structure of the pizza delivery market by type, 2021, %
1.4. The structure of the pizza delivery market in the Union Territories
The largest proportions of pizza delivery customers are found in the largest Indian cities with a million population, where the experience of ordering ready-made food to work or home is high.
Chart 3. Structure of pizza delivery in India by Union Territories, 2021, %
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1.5. Assessment of current trends and development prospects of the studied market
Market trends include:
The Indian pizza delivery market is moving away from the restaurant format into the dark kitchen segment (kitchen without a hall for visitors, focused only on delivery);
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1.6. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, demand.
Economic
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation. The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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Chart 4. Dynamics of India's GDP, 2014–2021, % to the previous year
In 2021, GDP grew by …%, fully offsetting the decline in 2020. According to the Ministry of Economic Development, both manufacturing industries and industries focused on consumer demand contributed to the recovery of the Indian economy in 2021.
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Experts differ significantly on the dynamics of India's GDP in 2022: IIF Chief Economist Robin Brooks gives the most negative forecast - “minus” …%, the Institute of International Finance predicts a decline in GDP by …%. More optimistic in Bank Zenit – the credit institution expects the economy to decline by …% by the end of the year
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Dollar rate
In 2017, the dynamics of the dollar exchange rate is oscillatory, but without sharp increases or falls compared to 2016. For the period from January to December 2017, the maximum value of the dollar exchange rate is 60,2 Rs., and the minimum is 56,2 Rs. .
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The official dollar exchange rate, set by the Central Bank on March 1, 2022, was 93,6 Rs., but already on March 11, the rate was 120,4 Rs./USD. A number of measures were taken to stabilize the situation on the foreign exchange market. The Bank of India has sharply raised its key rate from 9,5% to 20% per annum. The regulator explained its decision as a "drastic change" in the conditions for the Indian economy. In addition, the Ministry of Finance announced that it would oblige Indian exporters to sell 80% of foreign exchange earnings in the market. According to the Bank of India, 80% of exporters' foreign exchange earnings is about $470-480 billion a year. By May 2022, the official exchange rate dropped to 69,4 Rs./USD.
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The situation in the catering market
According to Rosstat, the turnover of public catering enterprises in India in 2021 increased by …% in comparable prices compared to 2020 and amounted to … trillion Rs. against … trillion Rs. a year earlier. In its statistics, Rosstat takes into account the turnover of restaurants, cafes, bars, canteens at enterprises and institutions, as well as organizations that supply catering products.
Diagram 5. Turnover of public catering, 2017–2021, trillion Rs.
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The growth in the share of delivery in the turnover of public catering has a positive impact on the market.
Population
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The current demographic situation in India is characterized by natural population decline (since 2017), which is accelerating, and migration growth, which does not compensate for natural decline.
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Real income of the population
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At the end of 2019, real money incomes of Indians increased by …%. The peak value was reached in 3 sq. – …%, in the 4th quarter. the growth rate of the indicator slowed down to …%.
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According to Rosstat, the level of real disposable income of Indians for Jan.-Mar. 2022 decreased by …% compared to the same period in 2021
The economic situation in 2022 is mainly influenced by geopolitics. As the key rate rises, so does inflation. Growing inflation leads to a fall in real disposable money incomes of the population. Negative influence of the factor.
technological
Transport congestion
At the end of 2021, among Indian cities, the leader in congestion is the Moscow Region, which is on the second line of the world ranking of the annual Traffic Index study conducted by TomTom: : 140 lost hours, the level of road congestion is …%, over the year the indicator increased by …%.
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Internet penetration
For a long time, pizza and sushi were pretty much the only food you could order home. With the advent of online delivery aggregators, the assortment began to expand, and the way food is ordered has changed: since 2015, the Internet will begin to lead, the number of orders through this channel begins to grow significantly.
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Technological change and product innovation
In the pizza delivery market, it was IT tools that became the key driver of the market and contributed to the formation of a stable flow of orders.
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1.7. Analysis of sectoral indicators of financial and economic activity
The analysis of sectoral indicators of financial and economic activity was carried out on the basis of data on the financial indicators of key market companies.
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For Indian companies, the normative value of the absolute liquidity ratio is in the range of 0,2–0,5 times. In the pizza delivery industry, throughout the entire study period, except for 2019, the indicator is within the standard values.
Business activity is the ability of an enterprise, based on the results of its economic activity, to take a stable position in a competitive market, it is the performance of an enterprise in relation to the amount of resource consumption in the process of the operating cycle.
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The stability of the financial position of the enterprise is impossible without effective management of working capital, based on the identification of significant factors and measures to provide the enterprise with its own working capital.
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Part 2. Competitive Analysis in the Pizza Delivery Market in India
2.1. Major players in the market
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2.2. Market shares of the largest competitors
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The pizza delivery market in India is characterized by a low level of concentration (large number of operators with relatively small market shares, Herfindahl-Hirschman HHI <1000 - low concentration market). Mergers and acquisitions are allowed freely.
2.3. Profiles of major players
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Part 3: Pizza Delivery Consumption Analysis
3.1. Estimated consumption of pizza delivery per capita
Estimation of consumption volume per capita was made by GidMarket on the basis of the ratio of market volume to the population of India.
If in 2017 a Indian on average used pizza delivery for … Rs. per year, then in 2021 this figure amounted to … Rs./pers. in year. It should be noted that the pizza delivery service is becoming not only a preference for residents of the Moscow region, St. Petersburg, million-plus cities - in recent years, delivery has been actively developing in cities with a population of less than 1 million people.
3.2. Market Saturation and Estimated Market Potential in India
The pizza delivery market is in its early stages of maturity. Competition in the pizza delivery market is high, however, due to the reduction in incomes of the population amid the Ukrainian crisis, some companies are likely to have to close, which will strengthen the position of larger players.
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3.3. Description of consumer preferences
A study conducted in early 2020 by Domino's Pizza Russia showed that when ordering food for delivery in the QSR category (fast food restaurants), the two key sales drivers are the taste and quality of food (the weight of this criterion is ...%) and price (... %). At the same time, the third most important criterion when ordering for delivery was the preservation of food temperature (…%).
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3.4. Price analysis
The consumer price index for pizza delivery services was calculated by GidMarket on the basis of official statistics on price indices for products of fast food catering establishments and taxi rides.
For the period 2017–2021 the average annual consumer price index for pizza delivery services amounted to …%, the largest increase in consumer prices was observed in 2021 – an increase of …% per year, the smallest – in 2017 – “minus” …%. For Jan.-Mar. In 2022, the increase in consumer prices for pizza delivery increased by …%.
Continuing to analyze the price component of the market, we note that the pizza delivery service is paid, regardless of who provides it. These are the costs that are already included in the price of the pizza, even if the delivery service (the restaurant's own delivery service, specialized delivery company) offers it for free to the customer.
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Part 5. Forecast for the development of the pizza delivery market until 2026
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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
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List of diagrams
Diagram 1. Dynamics of the pizza delivery market, 2017–2021, billion Rs.
Chart 2. Structure of the pizza delivery market by type, 2021, %
Chart 3. Structure of pizza delivery in India by Union Territories, 2021, %
Chart 4. Dynamics of India's GDP, 2014–2021, % to the previous year
Chart 5. Monthly dynamics of the US dollar against the rupee, 2017-May 2022, Rs. for 1 US dollar
Diagram 6. Turnover of public catering, 2017–2021, trillion Rs.
Diagram 7. Population dynamics in India, as of 01 Jan. 2013–2022, million people
Chart 8. Dynamics of real incomes of the population of India, 2014–2021, %
Chart 9. Profitability before tax (profit of the reporting period) in the pizza delivery industry in comparison with all sectors of the Indian economy, 2017-2021, %
Chart 10. Current liquidity (total coverage) in pizza delivery for 2017–2021, times
Chart 11. Business activity (average receivables turnover period) in pizza delivery, 2017–2021, days days
Chart 12. Financial sustainability (capacity) in the pizza delivery industry, in comparison with all sectors of the Indian economy, 2017-2021, %
Diagram 13. Shares of the largest competitors in the pizza delivery market in 2021, %
Diagram 14. Dynamics of the total revenue of the largest pizza delivery market operators (TOP-5) in India, 2017–2021, billion Rs.
Chart 15. Consumption of pizza delivery per capita, 2017–2021, Rs./person
Diagram 16. Forecast of the pizza delivery market in 2022–2026, billion Rs.
List of tables
Table 1. Expert forecasts for the decline in real GDP in India in 2022, %
Table 2. Gross Margin of Pizza Delivery Industry Compared to All Industries in India, 2017-2021, %
Table 3. Absolute Liquidity in Pizza Delivery Compared to All Industries in India, 2017-2021, ra
Table 4. The main companies participating in the pizza delivery market in 2021
Table 5. Basic information about participant No. 1 of the pizza delivery market
Table 6. Basic information about participant No. 2 of the pizza delivery market
Table 7. Basic information about participant No. 3 of the pizza delivery market
Table 8. Basic information about participant No. 4 of the pizza delivery market
Table 9. Basic information about participant No. 5 of the pizza delivery market
Table 10. Consumer price indices in the pizza delivery market in India in 2017-Mar. 2022, %
Table 11. Average prices in the pizza delivery market by Union Territories, May 2022, Rs.
Table 12. Assessment of factors of investment attractiveness of the pizza delivery market
Table 13. Forecast indicators of the development of the Indian economy
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