Market Trends of Online Food Delivery Industry
Rising Popularity of Cloud Kitchens
The food delivery market is witnessing a rise in the popularity of cloud kitchens due to many consumers purchasing their food through online platforms. Thus, the increasing number of food orders through cloud kitchens is due to convenience, the hectic lifestyles of consumers, and intense internet penetration. Cloud kitchens have become the popular investment choice for established and new restaurateurs to open a food business. Faasos by Rebel Foods, Biryani By Kilo, and Freshmenu are some of the popular cloud kitchen chains operating in this segment.
Established restaurant chains are now also opening cloud kitchen outlets instead of opening dine-in outlets to cater to high food delivery orders. The ease of getting food delivered at a reasonable price and in record time has increased the number of orders placed online. Instead of dining out, people prefer to order in. Online food delivery is not only eating into the market share of traditional dine-in restaurants but is also replacing home cooking. Because of the shift in customer preference and an increased sense of hassle in dining out, the home delivery option has gained momentum and, along with that, has brought a change in the restaurant industry as now food overpowers the dining experience. For instance, in January 2022, Arabic REEF Technologies, a United States-based operator of delivery kitchens, logistics, and proximity hubs, announced plans to launch cloud kitchens for its network of restaurants and brands in the Middle East and North Africa. In November 2021, REEF acquired UAE-based cloud kitchen company iKcon, marking its first venture in the region.
North America Dominates the Market
- The North American market has a high market share in the global market, mainly due to strong user penetration rates in the United States. It is one of the largest markets for global online food delivery. It currently represents the world's biggest online food delivery market. Several factors drive north America's online food delivery market. The significant urban population, busy lifestyles, and increasing penetration of the internet and smartphones are some of the key drivers that have driven the growth of online food delivery in the region.
- Moreover, the United States' large young population, which constitutes most of the consumer base, has further facilitated this growth. In October 2021, Delivery Hero acquired Hugo's food and grocery delivery verticals and expanded its footprint in Central America and the Caribbean. Various online food delivery service providers are experimenting with innovative food delivery methods via self-driving cars, drones, and robots, positively influencing market growth.
- Moreover, individuals' high living standards continue to spur the region's demand for online food delivery packaging services. Some of the major players in North America, including Doordash, Uber Eats, Postmates, GrubHub -Seamless, and Caviar, are adopting strategies for developing the online food delivery market like new product development, global expansion, acquisitions, and investments.
