Flipkart sees small towns drive premium food demand ahead of IPO push

Vice president Nishant Dalal says Tier 2 and Tier 3 cities are fueling gourmet and premium food sales

Flipkart's food and nutrition business is growing on the back of a rising customer base in India's smaller towns.

 

The e-commerce giant's food and nutrition category grew 50 per cent year-on-year, with more than 60 per cent of demand for direct-to-consumer (D2C) food brands now coming from Tier-2 cities and beyond, according to Nishant Dalal, the company's vice president overseeing consumables, fast-moving consumer goods (FMCG) and general merchandise. Towns such as Dhulia, Dharwad and Hubli are driving demand for premium goods — Korean snacks, gourmet chocolates and cold-pressed oils — once confined to India's largest cities.

 

The shift comes as Flipkart leans on quick commerce and artificial intelligence (AI) ahead of a possible initial public offering (IPO).

 

While premium food adoption initially gained traction in metro cities, Dalal said it is no longer an urban-only phenomenon. Metros such as Bengaluru, Delhi, Mumbai, Gurugram, Kolkata and Thane remain steady contributors to overall food demand, but the next wave of growth is coming from Tier-2 cities and beyond. Cities such as Dhulia, Dharwad, Imphal, Hubli, Ujjain, Mirganj and Laharpur are now witnessing strong demand for categories that traditionally performed well only in larger cities.

 

“We are seeing consumers move beyond discounted staples towards healthier breakfasts, premium pantry products and global flavours,” Dalal told Business Standard. “Categories such as protein oats, high-protein peanut butter, premium dry fruits, dates, authentic ghee, olive oil and gourmet chocolates continue to witness strong growth. Korean snacks and instant noodles have emerged as one of the fastest-growing international food trends.”

 

The food and nutrition category's growth is being driven by rising digital adoption, evolving consumer preferences and increasing demand for healthier, premium and discovery-led food choices. Quick commerce remains a key contributor, with Flipkart Minutes accounting for 25 per cent of overall demand. Gen Z is at the forefront of this shift, contributing to 60 per cent year-on-year growth in the category.

 

“Younger consumers are increasingly discovering products through creators, recipes and short-form videos,” said Dalal. That is fuelling demand for functional nutrition, premium snacking and globally inspired food trends.

 

Driven by rising disposable incomes and a growing focus on preventive healthcare since the pandemic, India's health food market is on a rapid growth trajectory. Industry estimates project the sector will reach $59.8 billion by 2034, expanding at a compound annual growth rate (CAGR) of 9.79 per cent.

 

Dalal said food discovery is increasingly becoming content-led. Consumers, especially younger shoppers, are no longer searching for products in the traditional way. Instead, they are discovering recipes, wellness routines and trending foods through creators and short-form videos, and expect to purchase those products almost instantly. Flipkart has seen this behaviour play out across several categories, particularly protein-rich breakfasts, Korean snacks, premium chocolates, gourmet pantry essentials and healthier cooking ingredients.

 

“One of the biggest examples has been the rise of Korean-inspired foods, where products such as Cuppa Noodles and Korean-flavoured chips have witnessed significant traction, driven largely by creator content and popular culture,” said Dalal.

 

This trend was on display at the recent Flipkart Food Fest 2026, which drew more than 50 brands, 1,000 creators and celebrity chefs such as Farah Khan and Chef Ranveer Brar.

 

Artificial intelligence is becoming central to Flipkart's shopping experience, Dalal said. In food and grocery, AI improves search and personalises recommendations, helping customers navigate Flipkart's wide assortment based on their preferences, dietary habits and shopping behaviour. For sellers, AI tools improve product discoverability and optimise listings, while sellers retain control over pricing, assortment, inventory and promotional decisions.

 

Analysts said packaging and edible oil costs have also risen this year because of the West Asia conflict and higher crude oil prices. When asked about the impact, Dalal said that while there may be some challenges due to increases in raw material, fuel and utility costs, these are part of broader market cycles.

 

“Flipkart is a democratic marketplace, so product pricing is determined by individual sellers and brands,” he said. “With a strong customer value proposition and continued focus on affordability, Flipkart is well-positioned to continue delivering the right value and selection to consumers.”