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Online Food Delivery Services Market

Market Study on Online Food Delivery Services: PMR Foresees Various Opportunities, Analyzing Increasing Urbanization, Busy Lifestyles, Digitalization, and a Growing Preference for Diverse Culinary Experiences, Driving the Demand for Convenient and Efficient Food Delivery Solutions.

A Detailed Analysis of the Online Food Delivery Services Market Growth Driven by the Rising Demand for Convenient Dining Options, Changing Consumer Preferences, and the Expanding Global Reach of Digital Platforms.

Online Food Delivery Services Market

The global online food delivery services market is forecast to expand at a CAGR of 13.4% and thereby increase from a value of US$ 3.7 Bn in 2023 to US$ 90.3 Bn by the end of 2030.

Attributes

Key Insights

Online Food Delivery Services Market Size (2023E)

US$ 3.7 Bn

Projected Market Value (2030F)

US$ 90.3 Bn

Global Market Growth Rate (CAGR 2023 to 2030)

13.4%

Historical Market Growth Rate (CAGR 2018 to 2022)

13.0% CAGR

Revenue Share of Top Four Countries (2022E)

48%

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Market Introduction and Definition

Online food delivery services encompass a platform that enables individuals to order food and beverages through the Internet, utilizing either a website or a mobile application. The increased accessibility of the internet allows customers to explore diverse culinary options, view various cuisines, and check prices for their favorite dishes. Online food delivery platforms provide features such as convenient location-based delivery and timely delivery options. These services experience heightened demand, driven by factors such as busy work schedules and evolving lifestyles, resulting in a growing user base.

The market for online food delivery services includes all businesses that source packages from hotels, operating either through online platforms or dedicated mobile applications. The offerings may include ready-to-eat meals or items requiring specific preparation before consumption. Key advantages offered by online delivery services encompass substantial discounts, rewards, cashback incentives, doorstep delivery convenience, and multiple payment options. Additionally, food service providers are strategically establishing large warehouses to store fresh produce, ensuring the provision of high-quality food and fostering the adoption of online delivery services.

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Market Growth Drivers

Growing Prevalence of Remote Work, and Limiting Individuals' Time for Home-cooked Meals

The exponential expansion of the e-commerce industry in the past decade can be primarily attributed to the significant shift of consumers towards online platforms. This transformation is influenced by diverse factors, including industry-specific and global trends. Key drivers encompass the proliferation of online food delivery businesses, heightened consumer awareness of e-commerce advancements, secure and user-friendly online payment options, an upsurge in disposable income, and the growing prevalence of remote work, limiting individuals' time for home-cooked meals.

The surge in internet accessibility, widespread smartphone usage, streamlined electronic banking systems, optimized food-service logistics, and evolving lifestyles stand out as pivotal elements propelling the online food delivery sector's growth. According to a report from Zomato, Indian food delivery platforms are projected to reach 80 million monthly active users in 2021, with ambitious targets of achieving 200 million in the coming years. Consequently, the escalating number of smartphone users and expanding internet penetration play a pivotal role in fostering the expansion of online food delivery services.

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Market Restraints

Managing Large Delivery Volumes

The burgeoning popularity of online food ordering has led to a surge in order volumes, presenting significant logistical hurdles for food delivery companies. Numerous restaurants form partnerships with online food delivery platforms as a strategic means to expand their market reach. However, this collaboration often translates into a high influx of daily orders for restaurants, posing a considerable challenge in efficiently managing a large volume of orders across multiple platforms. The increased frequency of food orders also introduces risks related to improper food handling and order misplacement, resulting in erroneous deliveries and a decline in both food and service quality. The effective management of logistics operations for order fulfillment emerges as an additional challenge for online service delivery platforms. Delays in the delivery process can have detrimental effects on food quality, thereby leaving customers dissatisfied with the food delivery service and adversely impacting the market.

Ensuring Food Safety and Maintaining Quality During the Delivery Process

Meeting customer expectations for hot and fresh meals poses a challenge, particularly for items with specific temperature and freshness criteria. The logistics of last-mile delivery present a complex task. Effectively handling and optimizing delivery routes to guarantee timely deliveries is crucial, especially in densely populated urban areas.

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Opportunities

Emergence of User-friendly Applications and Technology-driven Networks

The incorporation of cutting-edge technologies, including machine learning and artificial intelligence, plays a pivotal role in elevating the online food ordering experience for customers. These technologies facilitate the integration of features such as chatbots, order tracking, personalized food and restaurant recommendations, and voice commands into online food delivery applications. Such features not only enhance client relations but also boost revenue by delivering a tailored and enriched food ordering experience.

In recent years, food companies have directed their efforts toward deploying advanced technologies like food delivery robots and drones to optimize delivery speeds and efficiency. A notable example is Domino's Pizza's collaboration with Flirtey in 2016, successfully delivering pizzas via drone in Whangaparaoa, New Zealand. Autonomous delivery robots are also anticipated to play a role in food delivery, exemplified by companies like Postmates, Inc., which utilized delivery robots in Los Angeles during the COVID-19 pandemic. Furthermore, various companies are investing in the development of online food ordering applications catering to both sellers and consumers. For instance, Cuboh Software Incorporated introduced an application that consolidates orders from different food delivery platforms, providing food delivery companies with a unified platform to view and manage orders. This application is expected to streamline and automate orders, thereby reducing preparation and delivery times. The implementation of such technologies is projected to improve food delivery efficiency, ensuring timely and quality service, ultimately contributing to market growth.

Analyst Viewpoint

The Online Food Delivery Services Market is anticipated to undergo substantial expansion and change. The surge in mobile app usage has been a pivotal factor driving the remarkable expansion of the online food delivery market. The ubiquity of mobile apps, fueled by the widespread adoption of smartphones, has brought culinary convenience directly to consumers' fingertips. These apps have streamlined the ordering process, offering an intuitive interface that enables users to effortlessly explore various restaurant options, customize orders, and securely complete transactions from any location and at any time. This level of accessibility seamlessly aligns with the fast-paced nature of modern lifestyles, allowing busy individuals to satisfy their cravings without relying on a computer or a physical menu. However, significant obstacles to the growth of the online food delivery market include concerns related to quality and food safety. A report from the Food Standards Agency revealed that a substantial 42% of consumers harbor apprehensions about food safety in online orders. Instances of mishandled or contaminated food during delivery are not uncommon, leading to an erosion of trust among consumers. Moreover, the inability to visually inspect food before consumption can result in dissatisfaction, as the taste and presentation may not meet expectations. Such concerns have the potential to generate customer complaints, necessitate refunds, and lead to the loss of loyal patrons.

Supply-side Dynamics

Several factors, including the Increasing use of mobile apps and digitalization for ordering and delivery, all contribute to the dynamic and rapid expansion of the global Online Food Delivery Services market. Deliveroo, DoorDash, Foodpanda, GrubHub, and Just Eat Holding Limited are market leaders in the manufacturing sector. The countries of Germany, Japan, China, France, and the United States are significant producers of various goods. The ongoing consumer preference for convenience and the expanding digital landscape is expected to bolster the online meal delivery services market in Germany. The industry is anticipated to sustain its growth momentum in the country, driven by changing customer preferences, urbanization trends, and technological advancements.

Several corporations are allocating resources toward expanding their capacity to satisfy the increasing need for Online Food Delivery. It is anticipated that these expansions will substantially alter the dynamics of the market, resulting in heightened competition, reduced prices, and an influx of innovative products.

Market Segmentation

Which Delivery Type are Expected to Benefit the Most from Revenue Generation?

Extensive Sales for Platform-to-consumer Model Due to Heightened Investments

Within the platform-to-consumer model, food delivery applications showcase nearby restaurants to customers, typically through a website or dedicated app. This model predominantly encompasses online delivery services that dispatch meals to customers from affiliated cloud kitchens or restaurants that do not have their delivery services. The platform-to-consumer segment is anticipated to experience substantial growth, particularly in capital cities, driven by heightened investments in this operational model.

What Channel Type Will Be Targeted the Most?

Highest Percent Share Attributed to Mobile Application Owing to Enhanced Features that Contribute to an Improved Overall User Experience

Mobile applications offer a convenient and user-friendly platform for customers to peruse menus, make orders, and monitor deliveries. The widespread adoption of these apps, facilitated by their ease of use and accessibility, has resulted in a substantial user base, fostering growth in this market segment. These mobile apps provide enhanced features that contribute to an improved overall user experience, including personalized recommendations, seamless navigation, real-time order tracking, and secure payment options. Such attributes not only elevate customer satisfaction but also foster loyalty, thereby propelling the expansion of the mobile applications segment in the online food delivery market.

Which Payment Method to Be Focused on the Most Regarding Sales?

Online Payment Method to Widen Footprint Due to Growing Familiarity with Digital Currency

Online payment services encompass transactions conducted via payment portals, net banking, or credit/debit cards. Additionally, a wallet feature is provided to facilitate user payments for orders. The utilization of a wallet also supports promotional activities and offers, contributing to heightened engagement with the application. The prevalence of online payments is driven by the growing familiarity with digital currency and collaborative efforts between financial institutions and online food delivery services.

Top Regional Markets

Increasingly Hectic Lifestyles, and Widespread Internet and Smartphone Usage to Fuel Growth for Easier Market Adoption

The North American market commands a substantial global market share, primarily driven by robust user penetration rates in the United States, making it a leading player in the worldwide online food delivery sector. Currently standing as the largest online food delivery market globally, North America owes its market dominance to several factors. These include a significant urban population, increasingly hectic lifestyles, and widespread internet and smartphone usage, all contributing to the region's thriving online food delivery landscape. Furthermore, the United States benefits from a sizable young population, forming the majority of the consumer base, thereby facilitating the continuous growth of the market. In 2022, the United States had around 21.64 million individuals aged 15 to 19, reflecting a marginal rise from the preceding year, where the count stood at 21.57 million within the same age group. Noteworthy strategic moves, such as Delivery Hero's acquisition of Hugo's food and grocery delivery verticals in October 2021, have expanded the market footprint in Central America and the Caribbean. Concurrently, various online food delivery service providers in the region are exploring innovative delivery methods involving self-driving cars, drones, and robots, further bolstering positive market growth trends.

Increasing Allure of Online Food Ordering Among Consumers to Advance Growth

Online food delivery services primarily target the millennial generation in Europe, given their hectic lifestyles. In the United Kingdom, millennials, constituting the largest generation with approximately 14.4 million individuals in 2021, tend to allocate a significant portion of their income to prepared food compared to previous generations. The increasing allure of online food ordering among consumers can be attributed to their growing purchasing power and evolving lifestyles. Significantly, the online food delivery industry holds more prominence in France, Italy, and the UK than in Spain. Key players in this sector, such as the UK-based platforms Deliveroo and Just Eat, act as intermediaries by providing online platforms for customers to place home delivery orders for meals. For instance, Just Eat, with its largest market being the UK, processes over 100 million orders annually, showcasing its substantial presence in the online food delivery market.

Competitive Intelligence and Business Strategy

Prominent organizations, including Deliveroo, DoorDash, and Foodpanda, are at the vanguard of this sector, providing inventive solutions by capitalizing on their technological prowess and vast experience in the Online Food Delivery Services industry. Organizations operating within this sector prioritize technological advancements, strategic alliances, and user experience improvement. These businesses make substantial R&D investments to craft technologically advanced and unique products, aiming to gain a competitive advantage while expanding the business in terms of size and reach.

To distinguish themselves in this highly competitive market, these businesses strive to differentiate their products. They achieve this by providing innovative features, personalized experiences, and efficient delivery services.

Key Recent Developments

New Product Launch

In December 2022, DoorDash Canada introduced new Partnership Plans designed to enhance support for restaurant partners across the nation. Local Canadian restaurant owners are offered three distinct plans, each with varying commission rates depending on the included services. Furthermore, all partnership plans incorporate DoorDash Storefront, an Online Ordering Software, that allows any restaurant to transform its website into a fully functional eCommerce store.

Market Impact: The launch of DoorDash Canada's new Partnership Plans, which offer a multitude of options and services for local restaurant owners, is set to propel the Online Food Delivery Services market in various ways. Through the provision of diverse plans featuring different commission rates, DoorDash is encouraging more restaurants to become part of their platform. This expansion of the network enhances the array of dining choices available to consumers. The incorporation of DoorDash Storefront into all partnership plans also enables restaurants to boost their online presence, effectively transforming their websites into efficient eCommerce stores.

In February 2023, Zomato, a leading online food delivery service provider, introduced its newest feature named Zomato Every Day, replacing the 10-minute delivery feature introduced the previous year.

Market Impact: The launch of Zomato's latest feature, Zomato Every Day, is expected to significantly impact the Online Food Delivery Services market. By replacing the previous 10-minute delivery feature, Zomato is likely focused on elevating and refining its service to align with changing consumer expectations. This strategic move has the potential to draw more users to the platform, as the new feature may offer enhanced value, convenience, or additional features. In the competitive realm of online food delivery, such innovations and enhancements play a pivotal role in fostering increased user engagement, building customer loyalty, and contributing to the overall expansion of the market. The introduction of Zomato every day has the potential to generate interest among consumers and could influence other market players to innovate, creating a positive and transformative impact within the industry.

Online Food Delivery Services Market Report Scope

Attribute

Details

Forecast Period

2023 to 2030

Historical Data Available for

2018 to 2022

Market Analysis

US$ Million for Value

Key Regions Covered

  • North America
  • Latin America
  • Europe
  • South Asia & Pacific
  • East Asia
  • The Middle East & Africa  

Key Countries Covered

  • United States
  • Canada
  • Germany
  • United Kingdom
  • France
  • Italy
  • Spain
  • Russia
  • China
  • Japan
  • South Korea
  • India
  • Thailand
  • Malaysia
  • Indonesia
  • Australia
  • New Zealand
  • GCC Countries
  • South Africa  

Key Market Segments Covered

  • Delivery Type
  • Channel Type
  • Payment Method
  • Region

Key Companies Profiled

  • Deliveroo
  • DoorDash
  • Foodpanda
  • GrubHub
  • Just Eat Holding Limited
  • Postmates Inc.
  • Swiggy
  • Takeaway.com
  • Zomato
  • Uber Technologies Inc.

Report Coverage

  • Market Forecast
  • Company Share Analysis
  • Competition Intelligence
  • DROT Analysis
  • Market Dynamics and Challenges
  • Strategic Growth Initiatives  

Customization & Pricing

Available upon request

Online Food Delivery Services Market Research Segmentation

By Delivery Type:

  • Restaurant-to-Consumer

  • Platform-to-Consumer

By Channel Type:

  • Website/Desktop

  • Mobile Application

By Payment Method:

  • Cash On Delivery

  • Online

By Region:

  • North America

  • Europe

  • East Asia

  • South Asia & Oceania

  • Latin America

  • Middle East & Africa

- Companies Covered in This Report -

  • Deliveroo

  • DoorDash

  • Foodpanda

  • GrubHub

  • Just Eat Holding Limited

  • Postmates Inc.

  • Swiggy

  • Takeaway.com

  • Zomato

Uber Technologies Inc.

- Frequently Asked Questions -

The market is anticipated to grow at a CAGR of 13.4% during the projected period.

The Online Food Delivery Services market was valued at USD 37,446.2 million in 2023.

The U.S. held the largest market share in 2023.

The prominent players in the market are Deliveroo, DoorDash, Foodpanda, GrubHub, and Just Eat Holding Limited, among others.

Platform-to-Consumer segment is expected to grow at the fastest growth during the forecast period.

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