To know the impact of COVID-19 On Online Food Delivery Market By Platform Type(Websites, Applications), By Business Model(Platform-to-Consumer, Restaurant-to-Consumer), By Payment Method(Online Payment, Cash on Delivery), Industry Analysis, Trends, And Forecast, 2021-2027 Market
Market Size Forecast Scenarios (Optimistic, Baseline and Pessimistic) 2021-2027
The global online food delivery market size is worth of USD 121.57 Billion in the 2020. The industry is further expected to grow at a CAGR of 10.39% between 2021 and 2027 and is predicted to reach a market value of approximately USD 189.07 Billion by 2027.
The increasing requirement for quick access to food at cheap costs is also powering the growth. Advantages provided by online delivery services include rewards & cashback offers, attractive discounts, multiple payment options, and doorstep delivery.
Scope of the Report;
Economic growth and increasing internet penetration are accelerating the global development of e-commerce sector. Additionally, consumers are using online services due to the rise in disposable income followed by trustworthy electronic payments, range of suppliers, and expanding delivery networks are also contributing to the growth of online food delivery market. Worldwide, approximately 4% of food is retailed via restaurants and fast-food chains. The market has already entered into the maturity phase in most countries, with steady growth. The widely used method, so far, is still the conventional method, in which food is ordered online by the consumer through a third-party platform or restaurant own websites. After restaurants accept the order, they wait for the restaurant to bring the food at the door. This conventional method acquires more than 90% percent of the market, out of which almost one-third are placed via phone.
Online food companies are already finding the way to delight their customers are demanding such services. Online food delivery is already having a considerable impact on the dine-in restaurant business. For instance, Celebrity chef Jamie Oliver cited online food delivery services as one of the main reasons for his restaurant chain growth. The prospect of spending a day at home and with on-demand Netflix & Chill and munching on favorite on-demand dinner trend is on the rise. Such factors are accelerating the market growth in a positive direction.
The market is segregated based on platform type, which is further divided into websites and applications. Based on the business model type, the market is segmented into order focused food delivery system, a logistics-based food delivery system, and a full-service food delivery system. On the basis of payment mode, the market is divided accordingly into online payment and cash on delivery. The market revenue for the platform segment of the online food delivery market is UUSD 121.57 Billion in 2020. The revenue growth is expected to depict a CAGR of 10.39%. In terms of business model, the largest segment is Platform-to-Consumer, with a market share of 53.03% in 2020. On the basis of region, Asia Pacific region is expected to account for the highest market share in 2020, with most revenue generated country China, which accounts for USD 28.76 Billion in 2020.
Top Online Food Delivery Companies
The market is highly competitive, and several leading key players offering online food delivery services include Deliveroo, Just Eat, Delivery Hero, Grub Hub, Uber Eats etc. are operating in a highly competitive market environment. Company’s key strategies to strengthen their market dominance include partnerships, mergers & acquisitions, and expansion to achieve consolidation and optimize their offerings. Additionally, players are increasingly offering order customization, technological innovation, and increasing the number of partnering restaurants to improve their offerings and services.
During the COVID-19 outbreak, online food delivery becomes more demanding as its elevated consumer access to prepared meals and allowed food providers to keep operating. From an economic viewpoint, while online food delivery provides job and sale opportunities, it has been scrutinized for the high commission charges applied by restaurants and questionable working conditions for delivery individuals. From a social perspective, online food delivery influences consumers' connection with their food and impacts public health outcomes and traffic systems. Environmental impacts include notable waste generation and its high carbon footprints. The COVID-19 outbreak has affected many industries drastically by disrupting the supply-demand chain, raw material supplies, unavailability of essential services, etc. During the COVID-19 outbreak, online food delivery has experienced a negative impact as well as a high positive effect on the market revenue generation. The negative impact is that most of the restaurants have shut down due to strict lockdown in most countries incorporated by the government to reduce the COVID-19 spread.
The global online food delivery is segmented into platform type, business model, payment method, and regions & countries:
By Platform Type
By Business Model
By Payment Method
- Online Payment
- Cash on Delivery
The most prominent trends observed in the market include customized food delivery and real-time order tracking. Moreover, companies are focusing more and increasing their investments in marketing & strategy planning, research, and development activities, and expanding their geographical footprint to maintain their market position. Most of the leading players follow a logistics-focused food delivery system due to the model’s ability to gain scale with increased speed and limited costs.
For instance, Delivery Hero’s marketing expenses included costs for customer acquisition worth USD 180.36 Million, which increased from USD 111.30 Million in 2017. Such expenditures in marketing activities reflect the increased competition in specific markets and continued roll-out of the company’s delivery operations.
Increasing customers, orders per customer, take rate, and gross merchandise value are some of the reasons expected to boost the growth of online food delivery market. Inequality, minimum wage levels, and restaurants' negotiating position vs. online platforms prove to be more significant factors driving attractive delivery service economics than population density and traffic congestion. This growing trend of online food delivery is likely to possess a potential growth opportunity for market growth.
Millennials spend a high percentage of their earnings on prepared food. This fact makes them the most important demographic of online food ordering and delivery businesses globally. According to Technomic’s Generational report, millennials either place orders online via the delivery app or visit restaurants for takeaway. Due to the hectic work schedules and fast-paced lifestyle, millennials are drawn to quick-service food ordering and delivery websites. A generation with increasing spending capacity and the largest share of the US labor force, millennials are the most important customers. Millennials’ preferences are vastly changing trends of all major industries. Fulfilling their demands through effortless ordering, quick checkout, and instant delivery are no longer the industry benchmarks. The introduction of new ordering channels and delivery options is one way of dealing with the challenge.
Upgradation of the distribution network, such as Distribution 4.0, to a more decentralized system is trending in the online food delivery services industry. In Distribution 4.0, suppliers partner with many players for the best market coverage between urban and rural markets, focusing on branding, marketing, and in-store merchandising to produce a best-in-class experience. Suppliers are likely to partner with aggregators, e-commerce delivery companies, modern trade distribution arms, and rural distribution companies to increase coverage. For instance, Amazon has planned to team up with many small-scale businesses, rural supermarkets, and retail outlets to increase their last-mile connectivity. Therefore, Distribution 4.0 is a trend that is expected to bring a positive impact on online food delivery market growth.
In January 2020, Zomato, a food delivery services company in India, had acquired Uber Eats India for $350 Mn in an all-stock transaction. In terms of value and number of orders, the combined entity of Uber Eats India and Zomato is expected to account for approximately 50-55% market share. Uber Eats, a US-based ride-hailing company, is an online food delivery services vertical of Uber.
Around 63% of Americans quit digital takeout orders if they have a poor customer experience, and 55% of US adults want a more accessible online ordering system. Food delivery platforms need to simplify ordering and allow customers to place orders via all possible channels such as virtual assistants, social media, smart devices, cars, etc. Domino’s Pizza was the first to succeed the Twitterverse allowing people to order Pizza by tweeting a pizza emoji to its Twitter account. Customers are required to open an online account on Dominos to get this advantage. After doing so, customers can save the default order, called an Easy Order, and link a Twitter account with their pizza profile. The first idea of Fooji was to let customers order all kinds of meals through corresponding emojis. After setting account, the customer had access to all food, beverages, sweets, and sides menu. The modern Fooji app has been modified into an experiential marketing platform enabling customers to get free products from food items and alcohol to branded kits.
Nowadays, people can also order food from their TVs while relaxing, watching television, or laying in bed. With Apple TV, customers can browse the entire Papa John’s menu and orders and check out in one tap. Papa John’s provides exclusive Apple TV discounts for each order.
Many food delivery services are now focusing on a unique niche. Being in a niche market can help new entrants and startups break through the entry barriers and the intense competition. Key players must be well-known to new niches gaining traction, including struggling with food waste, pet food, virtual kitchens, etc. Each year, 1/3rd of the food gets wasted worldwide. The app allows restaurants and grocery stores to eliminate leftovers or supply low-priced food to people in need. Food for All is one of the apps that offer unsold meals from local restaurants, cafes, and delis with a 50% discount. Another example is Food Rescue US, which is a volunteer-driven platform that actively participates in food rescue movements. Food Rescue US seeks to end hunger and provides more than 50 Million food-insecure Americans with fresh, usable food from restaurants and grocery stores. Such trends are expected to provide potential growth for the online food delivery market.
Key Benefits for Global Structural Core Materials Market Report–
- Global Online Food Delivery Market report covers in-depth historical and forecast analysis.
- Global Online Food Delivery Market research report provides detailed information about Market Introduction, Market Summary, Global market Revenue (Revenue USD), Market Drivers, Market Restraints, Market Opportunities, Competitive Analysis, Regional and Country Level.
- Global Online Food Delivery Market report helps to identify opportunities in the market place.
- Global Online Food Delivery Market report covers extensive analysis of emerging trends and competitive landscape.
Online Food Delivery Market By Regional & Country Level:
- Rest of Europe
- South Korea
- Rest Of APAC
- Rest of South America
Middle East and Africa
- Saudi Arabia
- South Africa
- Rest Of MEA
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Online Food Delivery Market Size, Share, Growth And Forecast By 2027