AI is Redefining the Online On-Demand Food Delivery Market, Set to Grow by USD 559.2 Billion (2024-2028) Due to Restaurant-Aggregator Partnerships – Technavio Report

NEW YORK, Sept. 18, 2024 /PRNewswire/ — Report with market evolution powered by AI- The global online on-demand food delivery services market size is estimated to grow by USD 559.2 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 34.65% during the forecast period. Increasing partnerships between restaurants and online food delivery aggregators is driving market growth, with a trend towards growing prominence of technology and iot devices. However, growing threat from direct delivery services offered by restaurants poses a challenge. Key market players include 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 Driver

Vendors in the global online on-demand food delivery services market are enhancing their businesses through technology investments. This includes expanding customer bases, developing infrastructure, and training personnel. Notably, restaurants and food delivery services are prioritizing cross-platform ordering capabilities for customer convenience. In the US, Dominos Anyware showcases this trend, enabling orders through IoT devices like smart TVs, smartwatches, and connected cars. Technology, particularly IoT, is poised to significantly impact the market during the forecast period. 

The Online On-Demand Food Delivery Services market is experiencing significant growth due to increased smartphone penetration and internet connectivity. AI-driven recommendations, order tracking, and personalized options are trending features. Healthier, sustainable meal options, plant-based foods, organic foods, pet food, grocery, alcohol, and meal delivery are expanding categories. Dark kitchens and virtual kitchens are emerging business models. Uber Eats Japan, Cartken, Mitsubishi Electric, DoorDash, and shipping services are major players. Volume of orders is high in urban markets, driven by millennials and tech giants. Competitive prices, discounts, and customer loyalty programs are key strategies. Venture capital and strategic maneuvers are shaping consolidation. Historic period shows continued growth from 2010s to present, with payment methods evolving from cardboard boxes to online portals. Ready-to-eat food and restaurant-to-customer models are also gaining traction. 

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 Market Challenges

Several restaurants are taking control of their online food delivery operations to manage branding, quality, safety, and hygiene directly. This shift allows for a more engaged customer relationship and potential cost savings from avoiding third-party delivery service commissions. Additionally, direct orders can lead to shorter delivery times and streamlined payment processes, enhancing brand loyalty. However, this trend may challenge the growth of the global online on-demand food delivery services market, as restaurants handle increasing order volumes themselves.In the historic period of the 21st century, online on-demand food delivery services have revolutionized the way we order and consume ready-to-eat food. The platform connects restaurants to customers through an online portal, enabling seamless ordering and payment methods. Internet penetration and smartphone usage have fueled this growth, with tech giants like Amazon, Uber, and Grubhub leading the charge. Challenges in this market include last-mile connectivity, meal delivery times, and restaurant review. Shipping services must ensure timely delivery using ecommerce delivery solutions and optimizing last-mile connectivity. Virtual kitchens, cloud kitchens, and ghost kitchens have emerged to cater to the increasing demand for online food sales. Millennials, with their preference for convenience and innovation, have driven the market. Servicing personnel, instore merchandising, and order processing systems have become essential components of the business model. Packaged food services, POS systems, and digital menu boards have also become crucial. Food preferences, sales trends, and order processing times are essential factors for restaurants to consider. DemandSage and other aggregators help restaurants manage their online sales and customer preferences. Robot food delivery and cardboard boxes are the latest innovations in the industry, addressing the need for contactless delivery and sustainable packaging. Insurance, furnishing, and meal delivery volumes are other areas of focus for businesses in this sector.

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Segment Overview 

This online on-demand food delivery services market report extensively covers market segmentation by

Business Segment1.1 Order-focused food delivery services1.2 Logistics-focused food delivery servicesType 2.1 Restaurant-to-consumer2.2 Platform-to-consumerGeography 3.1 APAC3.2 North America3.3 Europe3.4 Middle East and Africa3.5 South America

1.1 Order-focused food delivery services- Online on-demand food delivery services have become increasingly popular, offering customers the convenience of ordering meals from their preferred restaurants and having them delivered right to their doorstep. These services use advanced technology to facilitate seamless ordering, real-time tracking, and contactless delivery, making them a reliable solution for busy individuals and families. The market for online food delivery is growing rapidly, with companies investing in expanding their offerings, improving logistics, and enhancing the customer experience. By providing a convenient and efficient solution for meal preparation and delivery, these services have become an essential part of modern life.

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Research Analysis

The Online On-Demand Food Delivery Services Market is a rapidly growing industry that caters to the increasing demand for convenience and flexibility in meal consumption. Virtual kitchens and cloud kitchens have emerged as key players in this market, focusing solely on preparing meals for delivery orders. Millennials, with their preference for technology and convenience, are a significant consumer base. The market utilizes cardboard boxes and insulated bags for delivery, ensuring the food stays fresh during transit. Aggregators and ecommerce delivery platforms facilitate online sales, with last-mile connectivity ensuring timely delivery. Smartphones and mobile devices have become essential tools for order processing and digital menu boards. Robot food delivery and meal delivery times are innovations that aim to further streamline the process. Customer preferences and sales trends shape the menu offerings, while order processing systems and restaurant reviews help maintain quality. Insurance, servicing personnel, and furnishing are other important considerations for players in this market. Food preferences and delivery volumes continue to shape the industry, with virtual restaurants and ghost kitchens gaining popularity in urban markets.

Market Research Overview

The Online On-Demand Food Delivery Services market has seen significant growth in the historic period, driven by the increasing penetration of the internet and smartphone usage. This platform-to-customer model allows ready-to-eat food to be ordered online from restaurants or virtual kitchens and delivered to customers’ doors. Payment methods have evolved, with tech giants integrating e-wallets and other digital payment systems. Urban markets, particularly in developed countries, have seen high demand for food delivery services, with aggregators and e-commerce delivery companies servicing millions of orders per day. Last-mile connectivity and the rise of dark and cloud kitchens have enabled efficient delivery and cost savings. Millennials, with their preference for convenience and technology, have fueled the growth of this market. Meal delivery times, personalized orders, and AI-driven recommendations have become essential features for customer satisfaction. Healthier meal options, sustainable meal options, plant-based foods, and organic foods are also gaining popularity. The market is witnessing consolidation, with strategic maneuvers and venture capital investments shaping the competitive landscape. Companies like Uber Eats Japan, Cartken, and Mitsubishi Electric are making significant strides in the market. The future of food delivery services looks promising, with innovations like robot food delivery and meal aggregators offering restaurant options and competitive prices.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

Business SegmentOrder-focused Food Delivery ServicesLogistics-focused Food Delivery ServicesTypeRestaurant-to-consumerPlatform-to-consumerGeographyAPACNorth AmericaEuropeMiddle East And AfricaSouth America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio