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The online on-demand food delivery services market size is forecast to increase by USD 559.2 billion at a CAGR of 34.65% between 2023 and 2028. The market is experiencing significant growth, driven by increasing partnerships between restaurants and aggregators, as well as the growing prominence of technology and IoT devices. AI-driven recommendations and order tracking are becoming essential features for customers seeking convenience and personalized experiences. Moreover, the market is witnessing a trend towards healthier, sustainable meal options, including plant-based, organic, and locally sourced foods. Dark kitchens are gaining popularity as a cost-effective solution for meal delivery services, expanding their offerings beyond traditional restaurant menus. The market also includes the delivery of pet food, groceries, alcohol, and other non-food items, contributing to the volume of orders. However, the growing threat from direct delivery services offered by restaurants poses a challenge to market growth.
Online food delivery services have gained significant traction in urban markets, catering to the demands of millennials and the convenience-driven lifestyle. Virtual kitchens and cloud kitchens have emerged as key players in this sector, leveraging instore merchandising and order processing through digital menu boards and POS systems. The use of aggregators and ecommerce delivery services has streamlined last-mile connectivity, enabling meal delivery times to be faster than traditional restaurant services. The rise of online food delivery has led to innovations such as robot food delivery and virtual restaurants, or ghost kitchens, which focus solely on delivery and do not offer dine-in options.
Further, customer preferences and sales trends are shaping the industry, with meal delivery times and restaurant reviews playing a crucial role in decision-making. Furnishing, insurance, and servicing personnel are also becoming essential components of the online food delivery business model. Mobile devices, such as smartphones, have become the primary platform for online food sales, with cardboard boxes and packaging playing a critical role in ensuring the safe delivery of goods and services. The integration of food innovation and order processing technology is expected to further drive growth in the online food delivery market. Overall, the industry is poised for continued expansion, with delivery volumes and food preferences remaining key drivers.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The order-focused food delivery services segment is estimated to witness significant growth during the forecast period. Online food delivery services have gained significant traction in urban markets, particularly among millennials who prefer the convenience of having meals delivered to their doorsteps. In this business model, third-party aggregators act as intermediaries between restaurants and customers, allowing users to browse menus, prices, reviews, and ratings of various eateries in their vicinity through websites or mobile applications. Once an order is placed and confirmed, the company passes it on to the restaurant for preparation and delivery. The restaurant handles the last-mile connectivity, ensuring timely delivery of goods and services.
The aggregators' primary role is to generate new orders for restaurants, charging a commission (usually 10%-15% of the food price) for their services. Cardboard boxes and mobile devices have become essential tools in this on-demand economy, with some companies even experimenting with robot food delivery to enhance the customer experience.
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The order-focused food delivery services segment accounted for USD 37.50 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 71% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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In the Asia Pacific (APAC) region, the market is experiencing significant growth in 2023, with key contributors being the large consumer bases in China and India. Factors such as increased investments by companies to enhance logistics efficiency and the rising preference among millennials for convenience are driving market expansion. The market is highly competitive, with numerous international and regional players vying for market share. These companies differentiate themselves through pricing strategies and promotional offers. Small and medium-sized restaurants in the region are also collaborating with food delivery service providers to expand their customer reach. The use of mobile devices for ecommerce food delivery orders and the implementation of last-mile connectivity solutions are further enhancing the market's growth. Cardboard boxes and insulated bags are common packaging materials used to ensure the safe delivery of food items. Instore merchandising and partnerships with local businesses are additional strategies employed by aggregators to increase their market presence.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Increasing partnerships between restaurants and online food delivery aggregators is the key driver of the market. The market has experienced significant growth in recent years due to the increasing number of strategic partnerships between restaurants and food aggregators. These collaborations allow restaurants to expand their reach to a larger customer base through the online portals of food aggregators, while the platforms gain access to a wider selection of ready-to-eat food options for their users. Furthermore, food delivery companies are entering into contracts with established restaurants, providing delivery services in exchange for valuable customer insights and data analytics. The historic period of increasing internet penetration and the growing number of smartphone users have facilitated this trend. Tech giants, such as Amazon and Uber, have also entered the market, further fueling its growth through their vast resources and innovative business models.
Virtual kitchens have also emerged as a popular trend, allowing restaurants to focus solely on preparing food for delivery orders, thereby improving efficiency and reducing costs. Overall, these partnerships and trends are expected to positively impact the growth of the market during the forecast period.
The growing prominence of technology and IoT devices is the upcoming trend in the market. The market is witnessing significant growth as technology plays an increasingly important role in expanding customer bases, enhancing infrastructures, and training personnel. companies in this sector are leveraging advanced technologies such as the Internet of Things (IoT) to provide cross-platform ordering capabilities, ensuring convenience for consumers. For instance, in the US, Dominos Anyware enables customers to order pizza through various IoT devices, including smart TVs, smartwatches, and connected cars. This trend is anticipated to gain momentum during the forecast period, as more restaurants and food delivery services adopt technology to streamline their operations and cater to the evolving preferences of smartphone users and those with historic internet penetration.
With tech giants like Amazon and Google entering the market, competition is intensifying, and companies must continually innovate to stay competitive. Virtual kitchens are also gaining popularity as a cost-effective solution for restaurants looking to expand their delivery capabilities without the need for physical storefronts. Overall, the market is poised for vital growth in the coming years.
The growing threat from direct delivery services offered by restaurants is a key challenge affecting the market growth. In the historic period of increasing internet penetration and smartphone usage, online on-demand food delivery services have gained significant traction. Tech giants, such as Amazon and Uber, have entered the market with their shipping services, creating a competitive landscape. However, some restaurants are opting for a platform-to-customer approach, handling the delivery of online orders directly to ensure brand control, quality, safety, and hygiene. This approach allows restaurants to engage directly with their customers and retain valuable data. While online portals streamline the ordering process, various payment methods facilitate seamless transactions. The emergence of virtual kitchens further caters to the demand for ready-to-eat food, offering a convenient solution for consumers. According to DemandSage, the online on-demand food delivery market is projected to grow at a steady pace in the coming years.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Alibaba Group Holding Ltd. - The company offers?on-demand food delivery services and related equipment for various fast-food shops.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The online on-demand food delivery market has witnessed significant growth during the historic period, driven by the increasing number of smartphone users and internet penetration in urban markets. The market operates as a platform connecting restaurants to customers, enabling the ordering and delivery of ready-to-eat food through online portals. Payment methods have become more convenient with various options including cards and digital wallets. Tech giants have entered the market, offering food delivery services through their ecommerce delivery arms. Virtual kitchens and cloud kitchens have gained popularity, with servicing personnel preparing meals for delivery only, reducing overheads for restaurants. The market is witnessing innovation with robot food delivery and meal aggregators offering personalized orders, competitive prices, and discounts to boost customer loyalty. Food preferences have shifted towards healthier and sustainable meal options, including plant-based foods, organic foods, and meal delivery services offering customized meal plans.
Further, the market is expected to witness consolidation with strategic maneuvers such as Uber Eats Japan's acquisition of Deliveroo and Mitsubishi Electric's investment in Cartken. The volume of orders is projected to increase further with the aid of recommendation systems and order tracking features on mobile devices. The market trends include the integration of POS systems, digital menu boards, and meal delivery times to enhance the customer experience. Restaurant reviews and food innovation are key factors influencing customer preferences. The market is also witnessing the emergence of virtual restaurants and ghost kitchens, offering a wider range of restaurant options for consumers. The delivery of groceries, alcohol, pet food, and other goods and services through the same platform is expected to further boost market growth.
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Market Scope |
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Report Coverage |
Details |
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Page number |
165 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 34.65% |
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Market Growth 2024-2028 |
USD 559.2 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
25.86 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 71% |
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Key countries |
US, China, UK, Japan, and South Korea |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Alibaba Group Holding Ltd., Bundl Technologies Pvt. Ltd., Curefoods India Pvt. Ltd., Delivery Hero SE, Dominos Pizza Inc., DoorDash Inc., Dunzo Digital Pvt. Ltd., EatSure, Glovoapp23 SL, Grab Holdings Ltd., Grubhub Inc., HelloFood, HungryPanda Ltd., Just Eat Takeaway.com, Meituan Dianping, Movile, Rappi Inc., Talabat, Uber Technologies Inc., and Zomato Media Pvt. Ltd. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Business Segment
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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