San Francisco, 19 March 2024: The Report Online Food Delivery Market Size, Share & Trends Analysis Report By Type (Platform to Consumer, Restaurant to Consumer), By Region (North America, Europe), And Segment Forecasts, 2023 - 2030

The global online food delivery market size is expected to reach USD 505.50 billion by 2030, expanding at a CAGR of 10.3% from 2023 to 2030, according to the recent reports of Grand View Research, Inc. Smartphones allow users to easily browse a list of restaurants and place orders with their chosen restaurants. Improved connectivity and smartphone access are expected to enable market players to expand their presence in untapped markets, thereby increasing their customer base. Online food ordering through mobile applications allows users to connect with restaurants and provide relevant feedback essential to enhancing the food and delivery quality.

The soaring rate of smartphone adoption is driving new users to adopt online food ordering services, thereby contributing to market growth. The growth can be attributed to the increasing number of restaurants worldwide along with the widening usage of cloud-based technology and growing acceptance of Quick Service Restaurant (QSR) services. Owing to the pandemic, many packaged food services and restaurants chose online sales channels to meet consumer needs. As a result, the added benefit of installing POS systems to precisely identify customer preferences and sales trends is expected to augment the market’s growth.

However, unstable market prices are one of the key restraints of the market. Food prices in the online food delivery services market are highly volatile and are subject to several factors in the food industry. Online food delivery service businesses may find it difficult to keep track of market prices and develop a suitable pricing model.

Most delivery platforms make money through revenue streams such as customer delivery fees per order, in-app advertising, customer service fees, restaurant commission fees, and tips to drivers. Among these factors, restaurant commission fees are the most contentious as restaurants may increase the rate of their food due to higher commissions charged by online delivery platforms. These costs are further passed on to customers in terms of service charges, which are expected to drive the customer away from a particular restaurant due to high food prices.

The growth is mainly driven by rising internet penetration coupled with proliferation of smartphones, growing technology advancement, and emergence of cloud kitchens. Cloud kitchens facilitate low set-up costs and help cut down on operational expenses such as employment taxes, servicing personnel, furnishing, utilities, and insurance, making them an attractive investment option. This has compelled several restaurants to venture into cloud kitchen space to stay up to date with evolving market trends.

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The growth can be attributed to increasing number of restaurants worldwide along with the widening usage of cloud-based technology and growing acceptance of Quick Service Restaurant (QSR) services. Owing to pandemic, many packaged food services, and restaurants chose online sales channels to meet consumer needs. As a result, the added benefit of installing POS systems to identify customer preferences and sales trends precisely is expected to augment market’s growth. Further, several recent advancements in order processing techniques have aided restaurateurs in streamlining their order management. For instance, Kitchen Display System (KDS), a digital menu board for kitchen staff, automatically displays orders based on priority and flags any special dietary requests. This system communicates directly with the restaurant's POS system and tracks meal delivery times. These developments would further drive growth of online food delivery market during forecast period.

Online Food Delivery Market Report Highlights

• The platform-to-consumer segment is anticipated to observe a CAGR of 12.2% during the forecast period. According to industry reports, email marketing is a successful marketing in the U.S. that can help restaurants to connect with their users.
• Food delivery giants can also send newsletter updates, to share their blog content and encourage users to follow them across their social media channels
• Asia Pacific region is expected to grow at the fastest CAGR of 11.4% from 2023 to 2030 owing to increasing urbanization, rapid expansion in food delivery services, and the growing number of dual-income families across China and India
• Restaurants are adopting software technologies that allow customers to order and pay at the table using their smartphones and other devices. These developments and initiatives would contribute to the regional market growth during the forecast period

Furthermore, food delivery websites, such as GrubHub, PostMates, and Zomato, are allowing restaurants to improve their online presence and providing them with an opportunity to gain new customers and generate extra revenue. At the same time, restaurant review sites are also helping restaurants build up their reputation. While advances in the software and applications related to the food service industry show no signs of abating, restaurants need to adapt to changing ecosystem of their business and adopt management software to remain ahead of the competition. The scenario is anticipated to boost market growth.

Consumers now have access to a variety of applications, including online food delivery services, with improved network connectivity and an increase in number of smartphones. Online food ordering and delivery service is considered a fast-growing business owing to factors such as cost & time saving, safer and healthier food, increased customer loyalty, and highly customizable food options. Digital food innovation is constantly growing with recent advancements such as virtual restaurants and ghost kitchens. According to REVOLVING KITCHEN, the number of digital ordering and delivery is increasing by up to 300% compared to dine-in traffic.

Cloud kitchens witnessed a surge in popularity during COVID-19 pandemic due to the closure of several dine-in restaurants. This trend is expected to remain strong post-pandemic, owing to people getting accustomed to online ordering. According to data published by CloudKitchens.com, U.S. had approximately 1,500 cloud kitchens as of 2020, and about 51% of restaurateurs had shifted their business to cloud kitchens in 2020. Cloud kitchens enable owners to quickly expand their business across multiple locations with minimal upfront investment. Such advantages have fueled rise of cloud kitchens in recent years.

Online Food Delivery Market Report Scope

However, managing large delivery volumes is one of the key restraints for market. The growing popularity of online food ordering has increased order volume, leading to logistical challenges for food delivery companies. Several restaurants tie-up with online food delivery platforms to scale up their business. However, restaurants receive an influx of orders each day from these platforms. As such, managing a large volume of orders across multiple platforms can prove to be an uphill task for restaurants. This can also result in improper handling of food and lost orders, leading to degradation in food and service quality and wrong order delivery.

List of Key Players in the Online Food Delivery Market

• Delivery Hero SE
• DoorDash
• Domino's Pizza Inc.
• Ele.me (Alibaba Group Holding Limited)
• Grubhub
• McDonald's
• Deliveroo
• Papa John's International, Inc.
• Pizza Hut
• Just Eat Takeaway.com
• Uber Technologies Inc.
• Waiter.com, Inc.
• Zomato Ltd.