The global online food delivery services market was valued at 35.75 billion and is projected to register a considerable CAGR during the forecast period, 2021 – 2028. The growth of the market is attributed to the rising establishment of numerous online delivery platforms as well as increasing use of smartphones and internet penetration across the globe.
Online food delivery refers to a process of delivering foods to the customers’ doorsteps from online platforms. Consumers usually place their food orders through food delivery applications by using their computer and smartphones. To place an order in general, a customer has to search for a restaurant, select food items from the menu, add payment method, and confirm the order. The applications allow customers to register an account to make food ordering convenient. Consumers are more inclined towards online food delivery as they save their time and efforts to go out of their home and buy food.
Market Drivers, Restraints, Trends, and Opportunities
- Increasing number of dual income households as well as change in lifestyle and eating patterns are the key factors projected to drive the market growth.
- Easy access to a variety of food items across different food chains quickly and availability of affordable food prices are expected to fuel the market growth.
- Rising demand for fresh food, quick home delivery, and easy accessibility using smartphones are other vital factors fueling the market growth.
- Rising growth of the food industry and opening up numerous fast-food restaurants especially in emerging economies offer various growth opportunities to the market vendors.
- High penetration of Internet of Things (IoT) allow users to opt for online food delivery services through voice commands. These advancement in technology is expected to spur the market growth during the forecast period.
- Introduction of virtual restaurants and delivery-only kitchens are expected to boost the market growth.
- Inefficiency of restaurants to cope with large volume orders and rising incidence of fraudulent transaction are expected to hamper the market growth during the forecast period.
- Owing to the emergence of COVID-19 pandemic, consumers avoid dining out at restaurants. This is likely to boost the growth of online delivery services. However, service providers have to overcome the logistic challenges. The pandemic has positively impacted the market growth.
Global Online Food Delivery Services Market Segment Insights
Platform-to-consumer segment expected to account for a large market share
On the basis of types, the market is bifurcated into restaurant-to-consumer and platform-to-consumer. The platform-to-consumer segment is expected to account for a market share of more than 12.2% during the forecast period. The platform-to-consumer models offers shipment services to the restaurants that do not have in-house delivery options. Growing investment in this sector is expected to boost the segment growth during the forecast period. On the other hand, the restaurant-to-consumer segment is projected to expand at a substantial CAGR during the forecast period. In this segment, the service providers manage the ordering process and the restaurants deal with the shipment aspect. The introduction of various restaurant chains coupled with the expansion of the delivery services is expected to drive the segment growth.
Mobile applications segment projected to constitute a significant market share
Based on channel types, the market is segmented into websites/desktop and mobile applications. The mobile applications segment is projected to represent a market share of more than 10.2% during the forecast period. Increasing use of smartphone, high penetration of IoT, and advancement in technology such as introduction of 3G and 4G networks are the factors driving the segment growth. On the other hand, the website/desktop segment is expected to expand at a healthy CAGR during the forecast period. The growth of the segment can be attributed to wide adoption of website/desktop channel to order food online. Furthermore, the AI/VR integration in desktops/laptops is further driving the segment growth.
Online segment anticipated to account for a large market share.
On the basis of payment methods, the market is bifurcated into cash on delivery and online. The online segment is anticipated to hold a dominant market share during the forecast period owing to easy payment facilities that can be processed through several payment portals including net banking or credit/debit cards. Growing consumer awareness regarding digital money as well as increasing partnerships between banks and online delivery service providers are the major factors propelling the segment growth. On the other hand, the cash on delivery segment is expected to expand at a substantial CAGR during the forecast period owing to the prevailing preference for consumers to make cash payment due to security concerns of online transactions. However, banks are focusing on enhancing security to offer additional services to its users, which is expected to propel the segment expansion during the forecast period.
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