The global online food delivery services market is expected to grow from $107.44 billion in 2019 and to $111.32 billion in 2020 at a growth rate of 3.61%. The slow growth in 2020 is mainly due to the economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to grow and reach $154.34 billion in 2023 at CAGR of 11.51%.

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The Asia Pacific was the largest region in the online food delivery services market in 2019. North America was the second largest region in the online food delivery services market in 2019.

In January 2020, Zomato, an Indian food delivery services company, has acquired Indian operations of Uber Eats for $350 million in an all-stock transaction. The combined entity of Zomato and Uber Eats India is expected to corner more than a 50-55% market share in terms of the number and value of orders. Uber Eats is an online food delivery services vertical of Uber, a US-based ride-hailing company.

An increase in smartphone users has given a boost to online food delivery services worldwide. Smartphone users are the primary online shoppers for the F&B industry and an increase in the number of smartphone users reflects a potential increase in online shopping for food and beverages. The world F&B e-commerce users reached 1.5 billion in 2019 and are expected to grow by 800 million, with an average of 25% y-o-y growth, by 2024. Indian food delivery platform, Zomato, has 80 million monthly active users and has set targets of reaching 20 million over the next few years. Hence increase in smartphone users and internet penetration is driving growth in online food delivery services.

The cost of supply chain and logistics will be the key restraint for the online food delivery services market. This cost includes the cost incurred for order fulfillment, delivery cost, adjusting business resources to dynamic market demand and last-mile connectivity. Besides, there are costs of cardboard boxes for packaging, gas, mileage and the cost for hiring a driver. The supply chain and logistics has to be in place in order to avoid the spoilage of products with limited shelf life.

According to the report by Capgemini, in 2019, the retailers could lose up to 26% of their profit if they fail to upgrade their logistics system to ensure on-time delivery despite the increased online grocery system. Therefore, the costs incurred by the supplier side may restrain the growth of the online food delivery services market.