Global online food delivery services market to reach US$ 200 B by 2025

The Future of Global Online Food Delivery Services Market is bright and promising. The market may get into consolidation mode with the best among them surviving reiterating “Survival of the Fittest”.

The technological advancements such as autonomous delivery and cryptocurrency payment mode is set to augment well for the growth of the segment.

Definition / Scope
Market Overview
Market Risks
Market Trends
Industry Challenges
Technology Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

The Online Food Delivery market has become a Sunshine sector in the tech domain and it has been growing at a rapid rate globally due to the inherent benefits offered such as convenience, variety and cost available at the touch of a button.

Due to the increasing penetration of smartphones and widespread internet connectivity major cities and urban centers have become the epicenter of this evolution.

There have not only been significant investments made into the industry but also mergers & acquisitions made on a global scale. Many investment; technology and transportation companies have entered into the sector and want to take home a share of the pie.

The industry players are focusing on branching out their operations globally and are looking to dominate the local market.

Market Overview

Particulars	2019	2025
Online Food Delivery Services Market Value (US$ Billion)	114.13	200
Compounded Annual Growth Rate (CAGR %)	9.8%
Largest Segment by Delivery Type Value (US$ Bn)	Restaurant-to-Consumer: 63.91	Platform-to-Consumer: 115.76
Fastest Growing Segment by Delivery Type (CAGR %)	Platform-to-Consumer: 14%
Largest Segment by Channel Type Value (US$ Bn)	Mobile Applications : 68	Mobile Applications:125
Fastest Growing Segment by Channel Type (CAGR %)	Mobile Applications: 13%
Largest Segment by Payment Mode Value (US$ Bn)	Cash-on-Delivery: 57	Online: 112
Fastest Growing Segment by Payment Mode (CAGR %)	Online: 12%
Largest Regional Market Value (US$ Bn)	APAC: 59.3	APAC: 114
Fastest Growing Regional Market (CAGR %)	APAC: 10.5%

Type Insights

Based on Type, the online food delivery services market is segmented into restaurant-to-consumer and platform-to-consumer. The platform-to-consumer segment is expected to grow at a CAGR of 14% over the forecast period (2019 to 2025).

The platform-to-consumer segment deals with logistics and resource aspects of food delivery and simultaneously offering shipment services to restaurants that does not offer in-house delivery resources.

The increasing investment in this model is driving the growth of the segment in major cities.

The restaurant-to-consumer segment holds the major market share of more than 55% in 2019. In this model the restaurant handles the shipment aspect while the food delivery service provider manages the ordering process.

The players operating in the segment offer loyalty and subscription program to penetrate into the market. The integration of several restaurant chains with platforms such as Just Eat is fueling the segment growth.

Channel Type Insights

On the basis of Channel Type, the market for online food delivery services is divided into website/desktop and mobile applications. The mobile applications segment is estimated to register a CAGR exceeding 13% over the forecast period (2019 to 2025).

The growth of the segment is augmented by the increasing smartphone penetration, supported by technological advancements such as 3G and 4G networks.

Also the market is buoyant with restaurants offering discounts to customers for ordering food via mobile applications.

The Website / Desktop segment is expected to hold a market share of more than 60%. The Website / Desktop segment is expected to witness significant growth as restaurant-owners are focusing on increasing their foot traffic by expanding their online presence through websites. The emergence of e-commerce is further adding to the growth of the segment.

Payment Method Insights

The food delivery services market on the basis of payment method is categorized into cash on delivery and online payment. The online payment mode is expected to grow at a significant CAGR of 12% in the forecast period (2019 to 2025).

The online payment includes all digital payments made via payment portals, net-banking and credit/debit cards.

The increasing awareness among customers about digital money and the growing partnerships between payment providers and food delivery service providers is augmenting well for the growth of the segment.

The Cash-on-delivery segment accounted for more than 30% of the total market share. This segment is popular among customers as they are skeptical about the security of their online payment transactions.

The banks and other finance agents are working on strengthening their security mechanisms by implementing firewalls and encryption methodologies.

Regional Insights

Asia-Pacific is expected to witness a high growth rate of 10.5% and is contributed by increasing per-capita income and changing preference of millennials.

The regional growth is aided by the rising adoption of internet-enabled smartphones. The growth in e-commerce segment is furthering the adoption of food delivery applications in the region.

Market Risks

Highly Competitive Market

The online food delivery services market has become highly competitive. To counter the competitive scenario vendors are engaged in offering huge discounts to the customers and as the competition is fierce this has resulted in a scenario of discount-driven battle.

The winner in this highly competitive segment has to pay the price to come on top of the segment.

For instance, it costs Zomato, an Indian restaurant search; discovery and delivery company approximately USD 20 Million as a consequence of the various discount schemes it offers to its customers.

Fragmented Market

The Online Food Delivery Services market is highly fragmented. There exist a large number of local players in the market and they offer food delivery services to the local markets at a much lower price when compared to the organized international players.

The factors leading to the fragmentation of the Food Delivery Services Market are no economies of scale and strong competition in the market. This market will offer benefit to businesses with lower margins and expensive logistics.

They also have no advantage of scale when dealing with suppliers or buyers.

Top Market Opportunities

Autonomous Deliveries

The increase in application for online food delivery is opening up new avenues for OEMs and technology companies for the Autonomous technologies. It is expected that 2% of all global food deliveries will be done by autonomous drones by the year 2025.

There is a significant uptake of Autonomous deliveries as it offers several benefits such as lowering operational costs as it is a one-time investment to buy the autonomous delivery vehicle; also it decreases the time taken to deliver the food and improves efficiency of the delivery process.

There lies immense opportunities for OEMs and technology companies to cash in as the autonomous technology is in its nascent stage and can become a potential game changer in the food delivery services market.

The Autonomous delivery model offers several benefits as is evident with that derived by technology companies such as Marble which had launched its operations in San Francisco in 2017 and had lowered operational costs by 30%.

Cloud Kitchens

A cloud kitchen is a digital kitchen that accepts orders only via online ordering platform and does not offer dine-in facility. Cloud kitchens have evolved in the last few years backed by the emergence of food delivery apps such as UberEats and GrubHub.

The rise of food tech has made it easier for consumers to order and pay for food online, thus increasing food delivery orders.

Provided the hyper competitive restaurant environment, cloud kitchens are a low operational cost, low entry barrier and safest bet in food space. Basically the cloud kitchen is a restaurant minus a dine-in-facility that takes order through online ordering platforms.

This new-kitchen model is feeding the curiosity of startups that are looking to replace traditional business models that is scalable and sustainable.

Subscription-Model

Subscription Model involves customers to subscribe for the food delivery services for a fixed time-frame (monthly, quarterly, half-yearly or yearly) so that they can get free or priority delivery of their food orders.

The Subscription plans offer a new revenue stream for the food delivery services companies apart from the commissions received on a per-order basis. The food delivery companies charge subscription fees for a fixed period of time and encourage users to make frequent visits on their portals by giving them attractive offers and discounts in exchange.

Some of the companies offering the subscription services in the food delivery services market include Postmates, Sprig, Munchery, Swiggy and Zomato.

Blockchain

The emergence of blockchain is expected to offer lucrative opportunities for the online food delivery service providers by creating new platform of crypto food orders.

This enables customers to order any kind of takeaways through cryptocurrencies. It may help prevent fraudulent activities and improve food ordering experience using cryptocurrencies for orders.

For instance, PizzaforCoins accept orders via cryptocurrency.

Market Trends

Growing consumer demand for convenient food ordering

In the age of e-commerce, there is an increased amount of internet usage which makes consumers look for convenience that is answered by online food delivery apps.

Consumers are increasingly ordering food online due to the convenience, low costs and offering of wide variety of dishes available online over conventional on-premises dining.

This demand for convenience from consumers is propelling the growth of online food delivery services segment globally which is growing at a healthy CAGR of 15% during the forecast period (2019 to 2025).

Rising popularity of social media in online on-demand food delivery

Social media is emerging and it is rightfully used by food delivery vendors by leveraging it as a critical channel for marketing and promotional activities.

Established players in the market have an active social media presence through which they promote their online delivery services, food and restaurants. Social media opens up avenues for connecting directly with their customers and is expected to fuel the growth of the segment.

Increasing penetration of Smartphones and Mobile Apps

High penetration of smartphones has increased accessibility of these services from restaurants through mobile apps or web portal. This has, in turn, allowed the users to compare menus, prices, and reviews from home.

Mobile App for food ordering is one of the key drivers of the online food delivery services market for both restaurants owned service or order delivery cooperative services. It connects customers with multiple restaurants across the regions with multiple payment options such as net banking, cash on delivery or other third party payment options such as wallet payment.

Further the discount and promotional options offered by these vendors lure customers to opt for online food ordering.

Additionally with ongoing listing of new restaurants through various online delivery apps, the demand for online food delivery market is expected to increase.

For instance, fast-food chain restaurant chipotle witnessed a 700% increase in its delivery orders, a week after it got listed through the online food ordering app Doordash when it started offering free delivery for orders totalling above $10.

Inherent benefits offered by online food delivery services

The concept of online food ordering is gaining popularity among customers due to convenience provided in the form of door-step delivery; offering of several cash based offers such as cash back offers, discounts and reward points; option of alternate payment methods such as cash-on-delivery.

The Restaurants and cafes also benefit through the online mode which significantly reduces their operational costs incurred as a consequence of maintaining the infrastructure, call center and other expenses are reduced to half when a restaurant deals its orders online.

The Demographics factor

The growing dual-income families and changing lifestyle & dining patterns are expected to favour the growth of the online food delivery services market. Ailed by the demand for food at affordable prices is expected to drive the growth of the market.

The rise in the disposable income and surging working professionals are few of the demand generators for the online food delivery services market which are expected to bolster the growth of the segment.

Financial Hurdles

As in other digital businesses many of the online food delivery service companies are in deep losses as they have to spend more on their branding and promotional service which includes marketing via placing ads on digital media such as television, internet and other sources and offering frequent discounts to customers on a regular basis.

This business model is heavily taxing and is suitable only for enterprises sitting on deep pockets backed by Venture-Capital Funding. The companies that burn cash quickly are the ones that reach to the masses but they must be backed by further funding from VC’s, suppose if the frequent funding doesn’t happen these companies fail miserably.

For instance Tinyowl an Indian online food delivery services company was surviving by gasping venture funding and had to shut down within a year of its incubation due to lack of interest from VCs for further funding.

High operational costs for online food delivery services vendors

Since the online food delivery services vendors offer deep cuts of each meal delivered their operational costs are typically higher. The delivery system faces hurdles in the form of commission and other charges.

The minimum charges per order received by the service provider are less than the actual cost incurred. There is a serious flaw in the system as the actual cost incurred can be more than the commission received such as if the cost incurred is $ 7 per order and the commission ranges up to $5 per order there is a loss of revenue and this issue must be resolved as per the scenario.

Also the online food delivery services vendors offer discounts and spend heavily on marketing they incur heavy losses.

For instance, Delivery Hero’s marketing expenses included expenses for customer acquisition worth EUR 148.6 million in 2018, which increased from being EUR 91.7 million in 2017 which represents a significant rise on the operational costs incurred by the company whereas the company is still making losses.

Failure of restaurants to cope with high volumes

The quality of food delivered deteriorates when the number of food orders is high, which also requires additional resources to deliver the food as it requires much more delivery personnel and delivery vehicles.

This failure of restaurants to cater to multiple deliveries and inefficiency to cope with volumes are limiting the market growth. Often restaurants lack the operations & logistics to deal with the huge volume without any interruptions to services provided to walk-in customers.

It happens as a result of the failure of restaurants to create a second or alternative line of operations to deal with online delivery orders.

Industry Challenges

Attrition of delivery & logistics staff

With e-commerce platforms for all segments are emerging, the demand for delivery & logistics staffs has increased exponentially.

But the attrition is also high due to several reasons such as inadequate salary, poaching & absconding, no reasonable employee benefits and nor the opportunities for career growth, life and health risks (due to weather, constant changes in work schedule and they also carry such heavy, bulky bags), so, the delivery is certain to suffer when there is not enough delivery staff.

Failure of restaurants to comply with Safety and Quality standards

It is mandatory for food delivery service providers to verify that the outlets to be registered with the Food and Safety Assurance Associations such as Food Safety Agency (UK), U.S. Food and Drug Administration (USA) and Food Safety and Standards Authority of India.

But it is found that one-third of the restaurants listed on the food delivery apps are not registered with the Associations formulated by the Governments around the world for Food and Safety Standards.

The presence of so many unregistered outlets is a case of poor oversight or the outlets are gaming the system. Even the registered outlets were not any impressive.

Around 74 per cent of the eateries were found serving food from kitchens with unhygienic conditions. The water used for cooking was not tested, no pest controls were done, no periodic health check-up reports of people cooking food, poor sanitation, there was lack of cleanliness and ventilation in the kitchens.

It was found that some of the restaurants are cooking food out of makeshift shacks with appalling hygiene. The lack of interest from restaurant owners to comply with safety standards and offering quality assurance with the food delivered by them is taking its heed on the market and affecting the growth of the segment.

Technology Trends

The impact of technological advancements is a boon in disguise for the food delivery platforms. Some of the emerging technology trends in food delivery services market include:

Role of Big Data Analytics and Artificial Intelligence in Food Delivery

Big Data Analytics plays a key role in distribution services by offering analysis and providing insights such as optimized route by monitoring road traffic, offer customized offers and promotions by analyzing customer purchasing history, providing suggestions by reading reviews on social media.

Grubhub, for instance, analyzes data about millions of orders to come up with the most appropriate meal recommendations for each customer. Doordash employs big data to manage inventory and to predict the number of couriers required for a particular day, expected demand for a specific cuisine, and food preparation time.

Advancements in Artificial Intelligence and establishment of delivery drones is expected to drive the growth of the market. Manufacturers are keen in implementing AI solutions and Automation processes to efficiently streamline the delivery processes.

The Rise of Delivery Drones and Robots

Numerous Food Delivery Service Providers are aiming to reduce their reliance on Human Delivery staff and shift towards drone delivery models. Companies are increasingly focusing on development of drones and robots in order to speed up the distribution process and reduce operational costs.

For instance, Starship Technologies, a prominent company developing self-driving delivery robots in U.S, recently launched autonomous delivery services for corporate and academic campuses across U.S. and Europe. This has, in turn, resulted in robust growth of robotic food, grocery, and parcel delivery in residential areas.

These robots provide on-demand supply via an app, offering employees an advantage of convenience and flexibility of having food delivery regardless of place and time. The robots can be deployed in specially-designed pods that can be positioned around campuses, providing automated battery-swapping.

Other Key Market Trends

In the near-term intense competition is expected to be witnessed between in-house and third-party delivery services, with more companies offering both healthier and high-quality food even prepared by well-known chefs.

Many companies are harnessing the benefits offered by data-driven user experience optimization. They leverage technology and gain insights on customer preference by using personalized profiles, recommendation or digital tracking along the process from preparation to order delivery.

High growth demand from the market is further expected to boost the online food delivery market. Leading players such as Swiggy generates over 17 million orders per month followed by Zomato with around 13 million orders per month.

Growing presence of the leading players such as Swiggy, Foodpanda, UberEats, Zomato in smaller cities is further expected to create new revenue streams for these companies.

For instance, in September 2018, Swiggy launched its services in eight new tier 2 and tier 3 cities in India and has partnered with over 1200 restaurants for its expansion.

Market Size and Forecast

North America

North America accounted for more than 20% of the overall revenue share in 2019. The regional market is witnessing healthy growth due to significant consumer preference for fast food and due to changing lifestyles.

Furthermore, the presence of several online food service providers such as Just Eat Holding Limited and Postmates Inc. is further boosting the regional market growth.

USA Online Food Delivery Services Market Size

USD 14.83 Billion – The estimated market size of the US Online Food Delivery Services Market in 2019
9.6% – The CAGR growth rate of the US Online Food Delivery Services market in the forecast period 2019 to 2025
USD 25.7 Billion- The expected market size of the US Online Food Delivery Services Market in 2025

Canada Online Food Delivery Services Market Size

USD 5.93 Billion – The estimated market size of the Canadian Online Food Delivery Services Market in 2019
9.8% – The CAGR growth rate of the Canadian Online Food Delivery Services market in the forecast period 2019 to 2025
USD 10.39 Billion- The expected market size of the Canadian Online Food Delivery Services Market in 2025

Mexico Online Food Delivery Services Market Size

USD 2.96 Billion – The estimated market size of the Mexican Online Food Delivery Services Market in 2019
9.7% – The CAGR growth rate of the Mexican Online Food Delivery Services market size in the forecast period 2019 to 2025
USD 5.16 Billion- The expected market size of the Mexican Online Food Delivery Services Market in 2025

South America

South America are being targeted as new revenue pockets by market players as there is a sharp rise in food ordering in these countries.

The market players operating in the region are offering live customer service, delivery execution, and other related services, which is further fuelling the regional market growth.

Brazil Online Food Delivery Services Market Size

USD 3.6 Billion – The estimated market size of the Brazilian Online Food Delivery Services Market in 2019
9.5% – The CAGR growth rate of the Brazilian Online Food Delivery Services market in the forecast period 2019 to 2025
USD 6.21 Billion- The expected market size of the Brazilian Online Food Delivery Services Market in 2025

Argentina Online Food Delivery Services Market Size

USD 2.16 Billion – The estimated market size of the Argentinian Online Food Delivery Services Market in 2019
9.7% – The CAGR growth rate of the Argentinian Online Food Delivery Services market in the forecast period 2019 to 2025
USD 3.76 Billion- The expected market size of the Argentinian Online Food Delivery Services Market in 2025

Asia-Pacific

Asia Pacific dominated the global online food delivery market with market revenue of USD 59.34 billion and share of 52.1% for the year 2019. Asia Pacific is also the fastest growing region for this market and is anticipated to contribute revenue of USD 112 billion and share of 56.2% by 2025. The regional growth is driven by a surge in demand for easy and quick food delivery services.

China Online Food Delivery Services Market Size

USD 39 Billion – The estimated market size of the Chinese Online Food Delivery Services Market in 2019
10.4% – The CAGR growth rate of the Chinese Online Food Delivery Services market in the forecast period 2019 to 2025
USD 72.6 Billion- The expected market size of the Chinese Online Food Delivery Services Market in 2025

India Online Food Delivery Services Market Size

USD 7.8 Billion – The estimated market size of the Indian Online Food Delivery Services Market in 2019
10.6% – The CAGR growth rate of the Indian Online Food Delivery Services market size in the forecast period 2019 to 2025
USD 14.69 Billion- The expected market size of the Indian Online Food Delivery Services Market in 2025

Japan Online Food Delivery Services Market Size

USD 5.4 Billion – The estimated market size of the Japanese Online Food Delivery Services Market in 2019
10.2% – The CAGR growth rate of the Japanese Online Food Delivery Services market in the forecast period 2019 to 2025
USD 9.93 Billion- The expected market size of the Japanese Online Food Delivery Services Market in 2025

Europe

Europe is one of the leading regions in the market due to presence of well-organized food service industry, constant development, high disposable income, and rapid urbanization. U.K. is a key contributor to the market growth owing to rising focus of the fast-food chains on expansion of networks and advancements in online ordering systems.

UK Online Food Delivery Services Market Size

USD 5.93 Billion – The estimated market size of the UK Online Food Delivery Services Market in 2019
9.2% – The CAGR growth rate of the UK Online Food Delivery Services market size in the forecast period 2019 to 2025
USD 10.06 Billion- The expected market size of the UK Online Food Delivery Services Market in 2025

Germany Online Food Delivery Services Market Size

USD 4.45 Billion – The estimated market size of the German Online Food Delivery Services Market in 2019
9.5% – The CAGR growth rate of the German Online Food Delivery Services market in the forecast period 2019 to 2025
USD 7.67 Billion- The expected market size of the German Online Food Delivery Services Market in 2025

France Online Food Delivery Services Market Size

USD 4.1 Billion – The estimated market size of the French Online Food Delivery Services Market in 2019
9.4% – The CAGR growth rate of the French Online Food Delivery Services market in the forecast period 2019 to 2025
USD 7.03 Billion- The expected market size of the French Online Food Delivery Services Market in 2025

Middle East and Africa

ME&A is anticipated to exhibit substantial growth in future on account of rapid urbanization in countries, such as Saudi Arabia and UAE.

In addition, increasing disposable income, growing use of smartphones, and rising accessibility to internet are likely to fuel the growth in the region.

Saudi Arabia Online Food Delivery Services Market Size

USD 2.73 Billion – The estimated market size of the Saudi Arabian Online Food Delivery Services Market in 2019
9.5% – The CAGR growth rate of the Saudi Arabian Online Food Delivery Services market in the forecast period 2019 to 2025
USD 4.71 Billion- The expected market size of the Saudi Arabian Online Food Delivery Services Market in 2025

UAE Online Food Delivery Services Market Size

USD 1.75 Billion – The estimated market size of the UAE Online Food Delivery Services Market in 2019
9.5% – The CAGR growth rate of the UAE Online Food Delivery Services market in the forecast period 2019 to 2025
USD 3.02 Billion- The expected market size of the UAE Online Food Delivery Services Market in 2025

South Africa Online Food Delivery Services Market Size

USD 2.19 Billion – The estimated market size of the South African Online Food Delivery Services Market in 2019
9.6% – The CAGR growth rate of the South African Online Food Delivery Services market in the forecast period 2019 to 2025
USD 3.8 Billion- The expected market size of the South African Online Food Delivery Services Market in 2025

Market Outlook

All the details below are calculated for the base year 2019 and the forecast period – 2019 to 2025

US$ 114.13 Billion – Revenue in the online food delivery segment
9.8% – The expected CAGR growth rate of the Revenue of online food delivery segment in the forecast period
Platform-to-Consumer – The online food delivery services market’s largest segment
US$ 58 Billion – Revenue in the platform-to-consumer segment

China – The region with the most revenue generated among all regions globally
817.8 Million – The number of users in the platform-to-consumer segment
US$ 99.79 – The Average Revenue per User in the Platform-to-Consumer segment
37.1% – The market share of the users in the 25-34 years old
High Income users – The dominant users among all user groups
43.7% – The Market Share of High Income User group

Technology Roadmap

More innovation is expected in the development of new delivery methods as optimizing the user experience is strongly connected to the delivery process. Companies are experimenting with self-driving cars, robots and drones to make the delivery process easier and convenient.

As leaders in the segment many U.S companies are already experimenting with autonomous deliveries. For instance, Domino’s developed a self-driving pizza delivery robot and a delivery drone called DRU and Ford put up a self-driving van delivery model in cooperation with Postmates.

Another trend is the integration in an IoT environment. It is expected that voice-ordering will play an even bigger role. Food Delivery apps will integrate with them the virtual assistant system that enable voice-ordering.

Additionally smart assistants like Amazon echo will be equipped with online food ordering features. Also wearables will also be used for placing the orders.

Distribution Chain Analysis

The typical flowchart representing the interactions of various key players in the online food delivery services market is as above

The Online food delivery services ecosystem includes the following key players:

Customer: The customer initiates the process of ordering food online by selecting a restaurant and choosing his cuisine from the list of food available in the restaurant via the online delivery platform.

Also the food delivery process ends with the customer receiving the food being delivered by the delivery partner. The customer also pays for the delivery either by online payment or by cash-on-delivery

Restaurant: Restaurants takes the order via the food delivery platform and delivers the food via the delivery staff. In the case of restaurant-to-consumer delivery model the delivery is directly performed by the restaurant, while in case of platform-to-consumer delivery model the delivery of the food is handled by the delivery service provider.

Delivery Staff: Delivery executive picks up the order from the restaurant and delivers it to the customer. In case of cash on delivery payment mode the delivery executive receives the payment for the food delivered from the customer.

Aggregator: The Aggregator is the online food delivery service provider who offers a platform for ordering food and processes the payment transaction made by the customer and renders the same to the restaurant.

Payment service provider: The payment service provider is the one which handles the payment transactions made by the customer who can usually be a bank or finance agents and third-party transaction processing service provider.

Competitive Landscape

Companies that are focusing on improving their logistics capabilities and consumer experiences are making their mark in the segment. Adequate Funding and Investments is one of the major factors that helps scale the online food delivery services business.

For instance, In February 2019 raised $62.2 Million in a funding round led by Delivery Hero, Naspers Limited, Chunwei Capital, and others.

The companies are focusing on scaling their order volume either by partnering with local restaurants or by offering advanced delivery and ordering options.

The market players have realized the value offered by technology and are adopting cryptocurrencies as a payment method and are using drones and robots for delivery.

For instance, in December 2018, Project Wing delivered burritos in Australia using drones. In September 2017, Flytrex launched commercial drones for deliveries in Iceland. Furthermore, the companies are also focusing on strengthening their logistics network in order to expand their market reach.

For instance, in September 2017, Zomato acquired a logistics startup named Runnr to strengthen its logistics services and enhance its delivery fleet capacity in India and the UAE.

Competitive Factors

Mergers & acquisition, product development, business expansions are some of the undertakings taken by the companies to show their presence and expand its businesses in the global market.

For instance, in 2018, Foodpanda, one of the leading food delivery service providers was acquired by Ola in India.

Some of the key leading vendors in the online food delivery market are Foodpanda, Swiggy, UberEATS, Foodler, OrderUp, Zomato, Delivery Hero, Just Eat holding, Deliveroo, GrubHub, DoorDash and others.

Key Market Players

The Key players in the Online Food Delivery Services Market include:

Uber Eats is an American online food ordering and delivery platform launched by Uber in 2014 and based in San Francisco, California. The company made its foray into food delivery in August 2014 with the launch of the UberFRESH service in Santa Monica, California.

In 2015, the platform was renamed as UberEats and the ordering software was released as its own application, separate from the app for Uber rides.

GrubHub Inc provides food services. The Company offers mobile platform for restaurant pick-up and delivery orders, as well as assists diners in searching for local restaurant, tracking the order, and re-order for convenience. GrubHub operates within the United States and the United Kingdom.

Roofoods Ltd., doing business as Deliveroo, an online food delivery platform. The Company through its platform allows users to order meals from partner restaurants. Deliveroo serves customers in the United Kingdom.

Domino’s, Inc. operates as a distributor of pizza. The Company offers manufactures and distributes dough, soft drinks, non-alcoholic, beverages, and food supplies. Domino’s operates globally.

Just Eat PLC provides online marketplace for restaurant delivery. The Company offers online takeaway ordering services that allows consumers to search for and order in real-time from their local takeaway restaurants. Just Eat operates worldwide.

Bundl Technologies Private Limited (Swiggy) provides food ordering and delivery services. The Company operates a fleet of delivery personnel who pick-up orders from restaurants and deliver it to customers. Bundl Technologies serves customers in India.

Zomato Media Private Limited provides an online food and nightlife guide service. The Company operates a website and mobile app that provides menu, contact details, pictures, directions, ratings, and reviews for a multitude of restaurants. Zomato Media serves customers worldwide.

Meituan Dianping operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan Dianping provides its services throughout China.

DoorDash, Inc. provides restaurant food delivery services. The Company develops technology to connect customers with merchants through an on-demand food delivery application. DoorDash serves customers in the United States.

Postmates Inc. provides software solutions. The Company offers a platform that allows users to discover, order, and track food. Postmates serves customers in the United States.

Strategic Conclusion

The Future of the Global Online Food Delivery Services Market looks promising and highly competitive. The Market is driven by factors such as rising smartphone and internet penetration, changing preference of millennials for convenience, mouth-watering offers provided by the food delivery service providers.

The Online Food Delivery Services Market is capital intensive and the market is buoyant with big-ticket investments into the segment such as the recent fundraising round of Zomato totaling US$ 62.2 Million in 2018 led by Delivery Hero.

The market is expected to grow at a healthy CAGR of 9.8% in the forecast period (2019 to 2025). The overheads affecting the growth of the segment includes Financial Hurdles such as lack of funding which is as a consequence of the high cash burn nature of the business, High Operational Expenses (OpEx) and Failure of restaurants to deliver the volume.

The technological innovations in the segment are growing exponentially and if applied it will reap immense benefits to the beneficiary (food delivery service provider). The technologies that have their presence being felt and had a significant impact in the segment includes autonomous deliveries through self-driving robots and drones and Cryptocurrency as a payment method.

The technological innovations is a boon in disguise for the food delivery services market as it helps lower the operational costs which is a major barrier in the segment as it is typically high. The market is set to witness consolidation as the existing players are focusing on mergers & acquisitions

References

https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-changing-market-for-food-delivery
https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/thinking-inside-the-subscription-box-new-research-on-ecommerce-consumers
https://en.wikipedia.org/wiki/List_of_food_safety_organisations#Asia
https://www.govtech.com/fs/automation/Will-Consumers-Meet-Autonomous-Food-Deliveries-Halfway.html
https://www.pymnts.com/news/delivery/2019/whats-driving-the-future-of-autonomous-delivery/
https://agencyreporter.com/cloud-kitchens-in-india/
https://www.enukesoftware.com/blog/business-model-of-online-food-delivery-startups.html

Appendix

US$ – US Dollar
CAGR – Compounded Annual Growth Rate
APAC – Asia-Pacific Countries
IoT – Internet of Things