Food delivery, Q-commerce companies to get a boost, say analysts

NEW DELHI: Food delivery, quick service restaurants, as well as quick commerce (QC) players are set for a fresh bite of growth, with the recent GST reforms, a rise in discretionary spending, and an upswing in consumer confidence, say industry experts.Over the past few quarters, food delivery had lost momentum due to a weak sentiment and macro pressures, while QC profitability came under strain from heightened competition, rapid dark store rollouts, and higher customer acquisition costs, industry experts and analysts told TOI .Food delivery demand has been sluggish in recent quarters, with gross order value (GOV) growth slowing for both Swiggy and Zomato to 18% in FY25, compared with 19-20% in FY24, but the trend appears set to reverse, an analyst from Motilal Oswal Financial Services said.Further, the onset of the festive season is also poised to revive consumption, offering relief to the players.Naveen Malpani, partner and consumer industry leader at Grant Thornton Bharat, said, “The GST rationalisation is expected to unlock momentum in discretionary spending, particularly in food services and quick commerce.”With GST cuts on daily essentials and rising disposable incomes, quick commerce is likely to be one of the biggest beneficiaries, and could accelerate adoption in non-metros.“These reforms stimulate consumption, support small businesses, and provide a strong tailwind for the quick commerce sector,” Rohit Kapoor CEO, Food Marketplace, Swiggy, said in a LinkedIn post on Friday. Some industry experts, however, say food delivery platforms may see a mixed impact. “The inclusion of delivery services under Section 9(5) of the CGST Act means platforms are now liable to collect and remit GST on delivery charges. We have also seen most of the platforms increasing their delivery fees as well. This could lead to a marginal increase in delivery costs, though subscription models may help cushion the impact for regular users,” Malpani stated.Rahul Ganjoo, CEO, District by Zomato, said, “The GST Council’s decision to rationalise tax slabs will make quality experiences more accessible for urban and emerging city consumers and will also aid consumption and the economy in general.”However, Kazem Samandari, co-founder and executive chairman of L’Opéra, said, “The (GST) benefits are minimal, and indirect, such as possible lower costs for equipment and some services. What our fraternity needs most is to allow input credits, which are currently not available to us.”