Strong sales are expected to result from current trends in consumer behavior favoring more food-at-home consumption and online food purchases, which fit well with the prevailing ecommerce business model and growth investments.
The global online food delivery services market size was valued at $23.539 billion in 2018 and is expected to grow at a compound annual growth rate (CAGR) of 15.4% from 2019 to 2025.
The increasing use of smartphones and internet penetration are contributing to the market growth. The growth of the overall food delivery industry that allows customers to order food from an array of restaurants is playing a pivotal role in driving the market growth.
There is no doubt that the internet has revolutionized the way to do business. Companies are finding new customers, creating more connections, and expanding their client bases than ever before.
According to Statista, in the second quarter of 2020, the weekly value of online sales from specialized food stores peaked at 364.5 million British pounds in the United Kingdom.
Between the first quarter 2010 and the second quarter 2018, the value of specialized foods stores online sales has grown uninterrupted. However, since the second quarter 2018, sales have stagnated into 2019. Sales have increased substantially in the second and third quarters of 2020.
While supply chain disruptions, inflation and rising costs as well as the expected easing of government subsidies to consumers pose challenges for the industry in 2022, company’s offering consumers a strong shopping proposition are well positioned to maintain profitability in the current inflationary environment.
People are generally afraid of change, especially if it involves a technology that they do not fully understand. However, sometimes a large disruptive force may trigger them into embracing these technologies, despite their fears. It may be that Covid-19 is one such disruptive force that might have triggered a shift towards more digital food distribution.
A broad range of food sellers, from fresh produce suppliers, to restaurants, stand to benefit from the increased acceptance of ecommerce platforms.
Food safety is a major concern among consumers, and is one of the main reasons people prefer shopping at physical markets where they can assess the quality of food products themselves. Furthermore, Covid-19 has increased awareness on food safety among the general public.
One of the enduring fears that keeps people away from e-commerce platforms is the likelihood of being defrauded. The sharp rise of online platforms during Covid-19 has been marked by an attendant rise in online scams.
With consumers increasingly embracing it, there will likely be increased competition among existing and emerging players. Efficient logistics will therefore emerge as one of the differentiators among competitors, especially if they are to effectively expand into broader markets while avoiding transport bottlenecks.
Besides, the growing number of dual income families and changing lifestyle & eating patterns are anticipated to favor the market growth.
Furthermore, the growing demand for quick access to food at affordable prices is also driving the growth.
Benefits offered by online delivery services include attractive discounts, rewards and cashback offers, doorstep delivery, and multiple payment options.
Moreover, providers of food services are setting up large warehouses to store fresh produce for offering high-quality food and encouraging the adoption of online delivery services.