Global & Kenya changing market in E-Commerce within the food delivery
The business of delivering restaurant meals in Kenya is undergoing rapid change as new online platforms race to capture the markets and customers across the Africa and the region. Although these new Internet platforms are attracting considerable investment and high valuations— 5 platforms in Europe & the US are already valued at more than $1 billion—little real knowledge about market dynamics, growth potential, or customer behavior exists.
The shape of the market today
Worldwide, the market for food delivery stands at €83 billion, or 1 percent of the total food market and 4 percent of food sold through restaurants and fast-food chains. It has already matured in most countries, with an overall annual growth rate estimated at just 3.5 percent for the next five years.
By far, the most common form of delivery is the traditional model, in which the consumer places an order with the local pizza parlor and waits for the restaurant to bring the food to the door. This traditional category has a 90 percent market share, and most of those orders—almost three-quarters are still placed by phone.
However, as in so many other regions, the rise of digital technology is reshaping the region market. Consumers are getting accustomed to shopping online through apps or websites, with maximum convenience and transparency, increasingly expecting the same experience when it comes to ordering dinner.
Two types of online platforms have risen to fill that void. The first type is the “aggregators,” which emerged roughly 15 years ago; the second is the “new delivery” players, which appeared in 2013. Both allow consumers to compare menus, scan and post reviews, and place orders from a variety of restaurants with a single click. The aggregators, which are part of the traditional-delivery category, simply take orders from customers and route them to restaurants, which handle the delivery themselves. In contrast, the new-delivery players build their own logistics networks, providing delivery for restaurants that don’t have their own drivers.