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Food Delivery Industry still promises 31.76% CAGR

By Akshat Bansal 1st August 2018

A rapid change has been observed in past years in the way of delivering restaurants meals to home. Worldwide, the largest segment is “Restaurant to Consumer Delivery” with an estimated market volume of $78,734M in 2018. It is expected to generate revenue of $12,033M around the world. The only reason for the success of the business is the connection with end users. Increase in the number of platforms available to customer led the rapid change in the food delivery industry around the world. The end users are shifting from websites to mobile applications to order food.Food Delivery

China, US, UK, India, and France are the top 5 countries generating maximum revenue in Food Delivery Industry. As a matter of fact, China generates 6 times more revenue compared to revenue in the United States. China’s food delivery industry registered the fastest growth of 23% in 2017 as more and more youngsters are ordering food online.

“Platform to Consumer Delivery” segment attracts 25.3% of user penetration in Hong Kong followed by China, Netherlands, Canada and the United Kingdom. Currently, the revenue is showing a growth of 24%, which is quite high and the revenue growth is expected to drop to around 10% in the next half-decade. This segment attracted the revenue of $14,086M in 2017 and is expected to be more than $30,000 by 2022.

Online Food Delivery Competitive Landscape

Food Delivery industry has undergone a dynamic change. Food was delivered even in the past but with the technological advancement, food can be ordered online and delivered at customer doorstep.

Technological advancement, Internet penetration, the rise in urban population, an increase in spending power all contributing to the rise in competition in Food Delivery Landscape. Globally, food delivery industry is very competitive with the presence of major players along with mid and small size players. GrubHub, Just Eat, Seamless, UberEat, and Doordash are some of the major global leaders. Americans dominated the global online on-demand food delivery services market and accounted for a share of more than 40%. This is also due to the presence of almost every major player in the food delivery industry in the US.

The global online on-demand food delivery services market is expected to grow at a CAGR of 31.76% during the period 2017-2021. One of the major growth drivers is the convenience and accessibility food delivery enterprises offer. Popular on-demand food delivery businesses offer a large range of restaurant to order food from. They also allow to compare menu, prices and check the customer reviews based on his/her experience.

Best Market for Food Delivery Business

Online food delivery business is the most promising business to start with for aspiring entrepreneurs. Don’t get trapped in the Internet web. In fact, many facts of the food delivery industry are still unknown. Many opportunities in food delivery business are just around you; just waiting to be webbed.

Food Delivery

Most of the entrepreneurs start their business in their home country only. But the reality is that every country is not capable to generate as much revenue as USA, Japan, Italy, UK, and Australia generates. The United States is the biggest market for food delivery business, and $23,630.90M revenue generated annually makes the US an easy market to start the business for profit and revenue.

USA, Japan, Italy, United Kingdom and Australia are the biggest market for food delivery business in terms of revenue generation. Even if Japan is generating huge revenue but the food delivery industry growth is negative. That mean, revenue in Japan is declining every year. USA, Italy, United Kingdom and Australia have positive growth. Revenue in the food delivery industry in the USA is growing at an average of 3.9% followed by the UK, Italy, and Australia.

If you are planning to start your food delivery business in Japan or have an already existing food delivery business in Japan, you must look for other international markets. The US is the best market but the high competition makes it unfavorable for many entrepreneurs. Italy and the United Kingdom are also the good markets in terms of revenue generation. As a matter of fact, the growth in revenue isn’t on the higher sides but still, the positive growth makes them favorable.

Why is the United States the most favorable location for Food Delivery Business?

In the United States, the fact is that the Americans are dining in only 41% of their time. Americans prefer to take out their food or get their food delivered to their doorstep 59% of times.

Online Food Delivery segments amount to 9.6% CAGR (2018-2022) with the expected market volume of around $30000 in 2022. Barry Friends of Pentallect believes that “By most measures, the business is in its infancy. Current providers and new entrants are dramatically enhancing their capabilities, improving their overall value, and becoming increasingly attractive to consumers.”

The trend of ordering food from food delivery platform will continue in future. As per the Restaurant Online survey, 45% o Americans order food as they have no time to cook food at home and 38% of respondents order food online because of convenience it offers. Promotion at restaurants attracts 37% of customers to order from restaurants with loyalty and reward points.
Over 17 million consisting of more than 6% of the total US population are Asians. Starting the food delivery business with Asians as the target audience can be a good start. 6% seems small but it has the potential to create a new niche market for food delivery business. One can’t see a lot of authentic Asian restaurants on food delivery applications.
Gesoo catering to only the Asian population in the US with more than 200,000 active users ordering food at least twice a week.
California, Texas and New York are the most promising cities in the US for Asian food as these are the most populated cities of US. Tapping the niche market will create the loyal following for the brand.

Get in Touch with us if you want to build the next big on-demand food delivery business! And let’s begin your journey to success.


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