Food Delivery: Trend & Market Report 2020
Food delivery is not new.
Recently, if you talk about "food delivery", depending on where you are from, the first thing that comes to your mind might be a food delivery app.
If you are from the USA, that App might be DoorDash; If you are from South East Asia, that App might be Grab Food, and if you are from the United Kingdom, that App might be Just Eat or Deliveroo.
Despite the technological advancement in how we get our food, the concept itself is not new. Food has been delivered since before the days of delivery App. However, those orders are usually taken using different means such as a phone call and a website.
What makes food delivery different right now are four things:
- Customers can order food delivery within a single platform.
- The food can arrive within 1-hour.
- Restaurants do not have to a separate operation for delivery (e.g.: hiring courier, marketing & quality control)
Before the App, like Uber Eats and Grab food, restaurants which want to venture into the delivery business requires to hire someone who makes the delivery. In addition, they also have to invest in marketing efforts to ensure their delivery service is known and have an operation in place, ensuring the food is delivered on time.
With the Food Delivery App, customers can easily choose from a range of food available, and restaurants do not have to worry about how to get food delivered and marketing—creating a win-win situation for both parties.
Food Delivery Around the world
We will mainly focus on three regions: the United States, Southeast Asia, and Japan.
Food Delivery in the United States
Data source: statistics
The food delivery market in the United States is growing rapidly. It has been predicted that by the end of 2020, the food delivery market will worth 9.7 billion. As this prediction was made before the Covid-19 outbreak, there might be a significant change in numbers when the extend of COVID-19 influence is more understood.
Food delivery Solution
With such a market size up to grab, it's no surprise that the competition is the fiercest in the USA. While other countries, at most, have two to three top delivery Apps, the USA has more than seven delivery Apps in the market, such as:
- Uber Eats
Data source: Second Measure
Among all these food delivery businesses, DoorDash has the highest market share at 28%, followed by Grubhub at 28%, Uber Eats at 20%, and lastly, Postmates at 9%. There is no data about delivery.com as they might not be considered as the traditional food delivery market as they deliver more than food from restaurants.
Data source: Second Measure
Taking a closer look at each of these's businesses at the state level will reveal a totally different picture. For example, despite DoorDash having the largest share in the US, they only account for 17% of the market share in New York City, while Grubhub accounts for 62%.
Food Delivery in Southeast Asia
In Southeast Asia, the food delivery business has been expanding rapidly since 2015. According to the report made by Google, the region's food delivery market is predicted to grow to 20 billion by 2025.
Data source: The Asean Post
However, the overall market size in the region will vary largely depending on the countries. In 2018, Indonesia had the largest market share due to its sheer population size at 276 million. Singapore has the second-largest market share despite being the least populated country in the region. This is largely due to Singaporean being more tech-savvy and having more disposable income compared to other countries. However, all of this will change when other countries become more economically developed. For example, in 2025, Thailand is predicted to have a similar market size with Singapore.
Food Delivery Trend
The Southeast Asia delivery landscape is quite unique. There are many big and small delivery apps available for different types of customers for each country. Most of the time, these delivery apps are only available for local consumption.
That said, among all these Apps available, there is are two "super app" in the region that operates in many different countries - GrabFood and FoodPanda. Although no actual numbers are given in public, GrabFood disclosed that they are the number one food delivery company in countries like Vietnam, Thailand, and the Philippines.
Despite being a super app that operates across different countries, they are very localized and adapt to the demand required within the country. For example, for Grabfood, they had a durian campaign in Malaysia and Singapore where they worked with local durian farmers to deliver durian to consumers.
Food Delivery in Japan
The food delivery business market in Japan is around 408 Billion Yen (3 Billion USD$). What makes the food delivery market unique in Japan is that it is not growing as rapidly as those in the US and the Southeast Asia region. The growth rate is just 4% per year. The overall market size too seems to be a bit lackluster, given that Singapore alone has a market size of 1.8 billion despite having 25 times less population than Japan.
In addition, unlike other countries, Japan has very many delivery businesses that are preventing the growth of food delivery app. For example, businesses like convenience stores, which are found almost anywhere in Japan, can easily provide cheaper and easier access to food.
Food delivery Solution
Data source: AppApe
Currently, in Japan, the delivery service is monopolized by an App called Demae-can, which occupies around 50% of the market and followed closely by Uber Eats and Rakuten Delivery as the far 3rd.
Driven by the needs of easier access to food, the food delivery app has seen exponential growth in many different countries. However, every country has a very different cultural issue where the players in the market have to tackle to win the hearts of customers.