Global Online Food Delivery Market Growth Analysis and Forecast

Let’s see the evolution of on-demand food delivery services:

? 1st Generation – Order on Phone

The first phase of food delivery was started on phone calls as mentioned earlier. The steps for this were, calling a restaurant, placing an order, preparing an order by a restaurant, delivering it to the customer. Along with the quality of food, they also had to look after the delivery service.

Around billions of people used to call restaurants to order. As the market was evolving the second generation had offered us more. And because of this, the calling percentage of customers dropped.

? 2nd Generation – Mobile Marketplaces

And then comes the internet era. The growth in the usage of the internet among all the people was increasing day by day. Thus, the rapid increase of internet-enabled devices made every industry have an online presence. The second generation was not a full-fledged delivery platform but was working only as an aggregator.

In simple terms, the restaurants were listed on the app but the delivery service was from the restaurant side. The customers were able to see the restaurant menu but order it through the restaurant. Apart from this, due to various offers and discounts, many people were also turning towards online ordering.

The most important factor behind that was the convenience for customers that leads to customer satisfaction. The top apps in the food delivery market at that time were Zomato, GrubHub, etc. Global food delivery platforms were making a huge trend of online ordering and that will continue year by year.

? 3rd Generation – Full-service platform

As per the second generation, the aggregators started logistics also, which is a delivery service to customers. Some of the apps that started this trend were UberEats, Swiggy, Deliveroo, etc.

The restaurant has a major change. Now the restaurant doesn’t have to build its own website or app. Simply list their restaurant on the app and start getting orders. The app is responsible for assigning an order to the restaurant till the time it reaches the customers including delivery service.

And this is also the time of expanding the presence on social media. Social media is key for restaurants to connect with the target audience and engage directly with them. Several restaurants are on social media platforms to expand their customer base. This trend is expected to positively influence the growth of the global on-demand food delivery services market in the near future.

? 4th Generation – Ghost restaurants (Dark kitchens)

While there is a change in every industry, the same can be seen in the online food ordering business. The ghost restaurants, also known as cloud kitchens. These kitchens don’t have any physical presence. This model will have a high capability of earning profits for restaurants.

Because of cloud kitchens, restaurants will be able to save the real estate costs, staff, insurance, and a lot more which is required to build a restaurant. It can also help in maintaining the quality and will also get time to think of new strategies.

The food delivery apps are quite popular among the millennials and the next generation. The largest customer segment to use Internet services falls in this generation.

Popular on-demand food delivery services include a range of restaurants that allows customers to compare menus, prices, cuisines, and also able to see reviews by previous customers. While analyzing, restaurant reviews are taken into consideration for the growth of the business.

Facts about the online food delivery market:

? Market was expected to hit the $111.32 billion mark in 2020. Last year, the market value stood at $107.44 billion.

? By 2023, platform-to-consumer delivery will be the leading category with revenues of $82 billion, with Europe accounting for $7,897 million of that number.

Top 10 Facts About the Online Food Ordering Statistics

1) 31% say they use these third-party delivery services at least twice a week.

2) 34% of consumers spend at least $50 per order when ordering food online.

3) 20% of consumers say they spend more on off-premise orders compared to regular dine-in experiences.

4) 57% of millennials say that they have restaurant food delivered so they can watch movies and TV shows at home.

5) 59% of restaurant orders from millennials are takeout or delivery

6) Orders placed via smartphone and mobile apps will become a $38 billion industry by 2020.

7) 45% of consumers say that offering mobile ordering or loyalty programs would encourage them to use online ordering services more often.

8) Working with a third-party delivery service has been found to raise restaurant sales volume by 10 to 20 percent.

9) 60% of restaurant operators say that offering delivery has generated incremental sales.

10) 33% of consumers say they would be willing to pay a higher fee for faster delivery service.

Why do some of the app start-ups fail?

A recent report states that one of the major factors hindering the growth of the food delivery market is inefficient operational execution. Operations play a crucial role in any business. Efficient operational execution means providing on-time services as and when the demand arises.

However, many of the apps are still figuring out to overcome this challenge. Reaching customers on time and ensuring their trustworthiness can be problematic for on-demand service providers. This is because building and scaling a delivery app requires funding and also extremely complex processes.

For example, if any customer orders a food item from the food delivery service, the food delivery service provider needs to ensure that the customer request is fulfilled within the requested time.

If the service provider fails to provide efficient operational execution, it can lead to the dissatisfaction of the customer. And this can result in loss of customers and eventually customer retention.

However, high operational costs for online on-demand food delivery service providers, strict regulations on the safety and hygiene of food delivered are also some of the main reasons behind their failure.

Why People are Addicted to Online Food Ordering?

Online food ordering, the easiest way to escape from cooking your own food. Recent research about this says that one out of every four customers uses a food ordering app on their mobile. Online food delivery has revolutionized the global food industry. This trend first started in urban communities and now it has spread even to small towns.

The reason behind the growth is, in this corporate-driven world where time is more important than any other thing, getting a door-step food service is a profitable option. Working professionals who work between 9 am to 5 pm, students and job holders staying away from home are victims of unhealthy and unhygienic food.

The scenario where women staying back at home to prepare food is changing because they want to be more competent, highly aspirational, and willing to achieve greater heights.

Humans are always in search of a new variety of foods, delicious cuisines, and mouth-watering dishes. People’s taste buds crave for variety of tastes, people opt for online food delivery as they can get their desired cuisine delivered to their homes. Food is known to build connections between people.

Keeping this in mind, online food ordering systems created a strong image in people’s minds about the benefits of this system like multiple payment options, attractive offers, and discounts.

What is the forecast for upcoming opportunities in online food delivery services?

The future of online food delivery services is all about customer satisfaction. Customer needs are going to be taken care of by the restaurants. Customers will have different needs and expectations from the food delivery services. Some of them are:

1) Delivery time:

The time factor is very critical. The speed of delivery is the biggest variable in customer satisfaction. With an average, 60 percent of customers switch apps because of delivery time issues. The wait time for customers should not be more than 60 minutes.

2) Quality meals:

Along with other factors, the quality of food will also matter. Because of the restaurants that will not serve good quality food, sometimes they will also switch to other apps. Around 82 percent of the orders were delivered at home, while only 16 percent were placed from the workplace. So it is necessary to deliver quality meals all the time.

From all the researches made and analytics predictions, the market is only going to grow and consolidate more and more.

Who is going to be the king?