Food Delivery Industry of Bangladesh Making Strides Through Influx of Foreign Capital

Bangladesh Food-Delivery-Industry

In today’s “Doorstep Economy”, almost everything we need is just a few clicks away. It is possible to bring almost everything to our doorstep within a specified time. Earlier, only letters and necessary goods could be sent to the desired place by courier. With the blessing of tech startups, now it is possible to get everything you need from grocery to food and other services.

Food delivery services have gained a lot of popularity in the delivery industry of our country. Although the domestic food delivery industry is almost 8 years old, most food delivery companies are still confined to major cities. However, they are gradually moving towards delivery services to each corner of Bangladesh through a sustainable business model.

Restaurant Sector Overview

Before 2000, the restaurant chain concept was not well known in Bangladesh. At that time, some Chinese restaurants were operating in the elite areas of Dhaka. Besides, due to being a business center, some restaurants were established in the surrounding areas of Motijheel. In the first decade of the 21st century, along with the growth of the country’s economy, the restaurant sector also began to grow. In addition to business centers, many restaurants have sprung up around schools, colleges, universities, and adjacent areas of shopping malls. Some well-known international food chains also started business in Bangladesh at that time.

The arrival of the international chain restaurant in the food industry of Bangladesh started in 2003 with the launch of Pizza Hut in Gulshan, Dhaka. A year later, in 2004, A&W restaurant started its journey in Bangladesh. KFC came to Bangladesh in 2006. Charoen Pokphand Foods of Thailand, which has been running agri and animal feed business in Bangladesh since 1996, started operating CP Five Star Chicken in 2010.

Dine-in, fast food restaurants, coffee, and hot beverages have been gaining popularity in major cities of the country since 2010. In 2011, Rick Hubbard, a coffee master at the world-famous coffee giant Starbucks, started the activities of North End Coffee Roaster in Bangladesh. Gloria Jeans, an Australian retail coffeehouse chain, launched the following year in 2012. According to a report in The Daily Star, by 2016, CP was operating in Dhaka, Chittagong, and Sylhet with more than 250 outlets.

American burger chain Burger King and Indonesian kebab store chain Baba Rafi started their journey in Bangladesh in 2016. In the last decade, several local food restaurant chains like Takeout, Khana’s, Chillox, PizzaBurg, Cheez, Sultines Dine, Kachchi Bhai have also been very successful.

Even as a local burger brand, Takeout started its operations in Sri Lanka in 2017. Small and medium businesses have played the biggest role in the success of the country’s restaurant industry. During the primary stage, the restaurant sector relied solely on sole proprietary investment. Due to their investment, the country’s restaurant business began to develop. Food delivery providers and restaurant aggregator startups have boosted the development of the restaurant sector. In addition, the number of working people in urban areas, especially in Dhaka, has increased significantly over the past decade, as well as increased traffic congestion. As a result, restaurants and fast food have become more dependent on lunch or dinner. On the other hand, due to the lack of recreation centers, the leisure time of the city dwellers is very limited. The country’s growing restaurant industry was a place of little relief for the people. According to a 2016 report, the market size of the restaurant business in Bangladesh was more than BDT 4,500 Crore and the fast-food market size was around BDT 450 Crores. Taking advantage of this growth in the country’s restaurant industry, one after another restaurant aggregators and food delivery service providers, including HungryNaki and Foodpanda, began their operations.

Bangladeshi Food Delivery Industry

Compared to the top food-tech industries, the food-delivery industry of Bangladesh can be called a child. While the market size of India’s food-delivery industry is more than 6 billion, the size of Bangladesh’s food delivery industry has not yet exceeded 100 million.

China’s food delivery industry tops the world with a market of over 50 billion. Although the U.S. food-delivery sector ranks second in the world with a market size of more than half of China, or more than 26 billion, the U.S. market is one of the world’s best-funded markets. The global food delivery industry market size is around 140 billion dollars. The dynamics of the global food-tech ecosystem have changed through platform-to-consumer service providers such as Doordash and Uber Eats. So far, only 11% of people worldwide use food-tech applications. This suggests that the growth potential of the global food-tech industry is still very high. The overall food-delivery sector has the potential to grow 5-6 times or more in the current decade.

According to a news report from 2019, the food delivery companies in Bangladesh used to deliver 25,000 orders daily at that time. The four major industry players – HungryNaki, Foodpanda, Pathao Food, and Shohoz Food – accounted for 90% of the industry at that time. In 2020, eFood has been able to capture a large market share in a very short time. According to industry analysts, the market size of Bangladesh’s food delivery industry is around BDT 30-50 million. City-dwelling people have been one of the factors behind the success of such food delivery services. About 40 percent of the country’s population is under 25 years of age and more than 35% live in urban areas. The number of city-based workers is increasing every year who are more or less dependent on fast food. The working population spent a significant chunk of their time commuting to work and traveling within the city, which is why they have less time to cook at home. Taking advantage of this opportunity, food delivery service providers position themselves by bringing convenience factors into the lives of these working communities. In the beginning, food-delivery service providers had to rely on discounts for customer acquisitions. Domestic startups and foreign food tech companies were offering huge discounts to acquire a new customer and increase their market share. Despite such a lucrative market, food delivery companies have yet to replace one-stop go-to solutions for daily food consumption. One of the reasons behind this is that the cost of restaurant food is still much higher than the cost of homemade food. There is also a quality concern.

Meanwhile, the cost per meal is still higher for restaurants, including upfront cost, supply chain cost, VAT tax payment. However, the number of restaurant orders is increasing with the regular offer of food delivery service providers. Which will help restaurants optimize their cost per meal in the future. Consumers order food only when there is a discount, or through restaurants or aggregators on a special occasion. Nevertheless, industry analysts expect steady growth in the global food tech industry as well as the restaurant and food industry and food delivery services industry in Bangladesh. Analysts are arguing that where the boom in the restaurant industry in Bangladesh came from private-level investment, foreign investment is coming to the country through restaurant aggregators. Which is bringing enough Cash Flow and Long-Term Sustainability opportunities to grow these companies.

Food-Delivery Companies


The first food delivery service in Bangladesh was launched in 2013 through HungryNaki. The company is providing services in Dhaka, Chittagong, Sylhet and Cox’s Bazar. Unlike others, HungryNaki focuses on steady growth without going into aggressive discount games. HungryNaki, which has a market share of about 10% based on the number of daily order deliveries, had contracts with more than 2,500 restaurants by 2019. The food delivery service was bought out by Alibaba through Daraz Group.


FoodPanda is a multinational food delivery service provider and restaurant which is based in Berlin, operating in 14 countries including Bangladesh. Foodpanda, which started its journey in 2013, is well on its way to covering the whole of Bangladesh by providing services in more than 50 cities across the country. The company, which has contracts with more than 4,000 restaurants by 2019, has a market share of more than 30% based on the number of daily order deliveries. Foodpanda offers aggressive discounts for customer acquisition and retention.


Pathao Food

Pathao started providing food delivery service in 2015 after starting its journey through courier service. The company initially followed many aggressive discount policies to capture market share quickly. And in this case, the startup can be called successful. Pathao Food, which quickly gained more than 40% market share, had signed contracts with more than 5,000 restaurants by 2019.

pathao food

Shohoz Food

Shohoz is coming up with several services through their app. Services include bike ride-sharing, truck rental, launch and bus ticketing, movie ticketing as well as Food-on-the-go services. Shohoz offers good discount offers and promo codes to attract customers. In less than a year after launching in 2019, Shohoz Food signed contracts with more than 1,200 restaurants. The company has been able to capture a market share of around 10% in a relatively short period of time.

sohoz food


The online food ordering and delivery service Uber Eats is a subsidiary of the world-famous ride sharing platform Uber. In April 2019, Uber Eats started its activities in Dhaka with 150 restaurants as partners. UberEATS was able to capture a good customer base in a short period of time through international brand value, discounts, offers and various promises. Later, as there was more potential and demand, in March 2020, UberEats launched its service in Chittagong with about 250 restaurants as partners. But just a year later, in June 2020, Uber Eats closed its operations in Bangladesh.


With the launch of eFood in June 2020, Evaly started a food delivery service. Initially limited to Dhanmondi, Gulshan, and Uttara, but now food delivery service is being provided in the whole city of Dhaka and Chittagong. Initially limited to Dhanmondi, Gulshan, and Uttara, but now food delivery service is being provided in the whole city of Dhaka and Chittagong. Evaly has also recently signed a contract with cloud-based digital food court Kludio. Evaly customers can order food through eFood using their cashback balance. There are also discounts and various offers. As a result, eFood has started to share the market share of Foodpanda and Pathao Foods in the food delivery market.


Cookups started the journey with the goal of homemade food delivery. In addition to cooked food, homemade honey, oil and several other items are available on the company’s web platform. Their web blog also features recipes from many famous chefs in the country. In the 2019-20 financial year, the country’s e-commerce pioneer Chaldal invested in Cookups.



HomeChef follows almost the same business model as Cookups. However, where Cookups outsourced the delivery service, HomeChef operated through its own delivery team from the very beginning.



Cloud kitchen business in Bangladesh was started by food-tech startup Kludio. Kludio started Cloud Kitchen Business in 2019. Not only First Mover, Kludio is also the country’s first Full-stacked Cloud Kitchen. In addition to maintaining food quality, the startup is focusing on superior storage systems, use of artificial intelligence technology in temperature regulation, as well as faster delivery.



Foodfex is operating in Chittagong only on a small scale by finding the desired cuisine and restaurant in the specific area and providing food delivery service. In addition, Food Chain Asia, Khaidai Today, Food Express, Food Pink, Fosto and many more companies are doing business in similar business models.


Business Model

To survive in the competition in any market, the players of the industry have to go for quality products or price games. The country’s food delivery sector has been hyper-competitive for the past five years. In this case, the common strategy in the food delivery market is discount war. Determining base-level demand is impossible because many people reduce or do not order at all after the discount is over. In the case of food delivery companies, the revenue sources are basically three – delivery charges, commissions from restaurants, and income from promotional activities. As a delivery charge, most food delivery service providers charge users a minimum of BDT 9 to a maximum of BDT 70 per order. Most of the food delivery companies initially started business without any commission from the restaurants but now the companies are charging up to 25-30 percent on each order. In the case of restaurant chain shops, there is an opportunity to reduce the amount of commission through negotiation with food delivery services. Food delivery companies also charge a certain amount of money from a restaurant when they promote a restaurant on their app. No food tech company has yet achieved sustainability in its business model, largely due to its reliance on discounts. As a result, none of the restaurant aggregators and food delivery services are profitable yet.


In the context of Bangladesh, there are many possibilities for the restaurant and fast-food industry. There are many opportunities for food tech companies to grow in this promising market. Industry analysts believe that food tech and delivery service providers can make a significant contribution to accelerate growth in the restaurant and fast-food industry in Bangladesh.

Leave a Comment