The impact of globalization in the 1990s on the food industry helped it in terms of establishing business ventures with many food chains with non-Indian and fusion influences, including cafes. However, this also posed a huge competition to the existing local and regional establishments forcing diversification and innovation. This huge surge in the previous decade paved way for more quick service restaurants, and affordable fine dining that catered to niche consumers.
While the unorganized sector dominated the industry, much like others in the country, authorities need to constantly monitor and regulate the numerous unregistered street vendors who cater to the working middle class. Amidst the high food cost inflation in such a highly fragmented market, the success of the restaurant was determined by their profitability without compromising on quality and flavor. The latter also happened to be the most important determining factor for loyalty in customers.
The food delivery industry had gathered pace in recent years, changing and digitizing restaurants across the country. The convenience for customers came hand in hand with the need to ensure food quality during transportation and adjust marketing. Employing millions every year, the workforce in the sector partly shifted from waiters in sit-in restaurants to drivers for delivery companies. By the beginning of 2020, two major players, Swiggy and Zomato, had emerged top of the food delivery market, with a few smaller and local operators in place as well, depending on the region in question.
With the outbreak of the coronavirus (COVID-19) and subsequent lockdown, it came as no surprise that operational consequences weighed down heaviest on hospitality and restaurants around the world. When delivery drivers were allowed to operate again after initial disruptions, Indian restaurant owners and vendors became creative to cope with the crisis. More and more restaurants joined food delivery platforms, delivery-only ghost kitchens were opened, or adjusted their menu to the needs of their home-cooking-tired customers. Nevertheless, high operational costs caused major challenges for restaurants and prevented many from opening, although it was allowed in the later months of 2020. This slow recovery was disturbed by the second wave of the pandemic in early 2021, which hit India even harder than the first time. However, industry experts were still optimistic that the newly established concepts would lead them through troubled waters.