Food Delivery App Market [Sector Profile]

David Curry

Updated: December 3, 2020

The food delivery market has seen significant growth over the past five years. Led by platform-to-consumer services, such as DoorDash and Uber Eats, food delivery has expanded from takeaways to anything and everything, adding billions of dollars in potential revenue capture.

The network effects of more delivery riders, alongside route optimisations technologies, has enabled faster and cheaper delivery. This has created a flywheel effect for many of the food delivery operators, which continue to undercut competition on razor thin profit margins as they battle for market share.

Several of the aggregators (Just Eat, Grubhub) have recently incorporated this platform-to-consumer system, in which they are responsible for the delivery as well as the ordering process.

The past few years has also seen more consolidation, as the larger businesses attempt to reduce the amount of competition in the market.

COVID-19 has propelled the industry a few years into the future, as millions of people in lockdown ordered food online for the first time. Grocery delivery service Instacart said it achieved its 2022 goals in the third week of lockdown.

Uber Eats, Deliveroo and DoorDash have all reported a massive acceleration in orders between February and March, as the world went into lockdown.

While this surge in demand may cool off once we return to normality, food delivery operators expect it to have a somewhat lasting effect.

In this sector analysis, we will look into operations in the China, Europe, United States and United Kingdom. China, the US and the UK are the three largest individual countries for food delivery, Europe, primarily from Germany, Italy and Spain, is an emerging market which could surpass the US in a few years.

Table of Contents

Top Food Delivery Apps

US Food Delivery App Market

UK Food Delivery App Market

Europe Food Delivery App Market

China Food Delivery App Market

Global Food Delivery App Market

Top Food Delivery Apps

Food delivery is a global industry, powered by the gig economy which has swept North America, Europe and Asia in the past decade. China’s food delivery apps have the largest userbase and market penetration, reaching over 650 million people, the US is the second largest market and the most well funded.

Uber EatsThe most widely available food delivery service, active in six continents and first or second in gross orders in most countries
Just EatLeader of food delivery in the UK and active in Europe and Australia, also holds a stake in Brazilian food aggregator iFood
GrubhubOriginal aggregator in the US and with Seamless, controlled over 50 percent of US online food delivery up until 2018
Takeaway.comA European aggregator responsible (through subsidiaries) for most online food delivery in Germany, Netherlands and Belgium 
DoorDashThe current leader in online food delivery in the US, which also pioneered the platform-to-consumer model
PostmatesA subsidiary of Uber Eats since 2019, responsible for about 10 percent of online food delivery in the United States
DeliverooThe pioneer of platform-to-consumer in the UK, it now operates in 13 countries, competing with Uber and Just Eat
Delivery HeroThrough its many subsidiaries (including Food Panda), Delivery Hero has a controlling interest in food delivery platforms in over 40 countries
Ele.meOwned by Alibaba, Ele.me is one of the two major food delivery platforms in China. It has over 200 million active users
Meituan Dianping The other half of the online food delivery industry in China. Tencent is the largest stakeholder, with a 20 percent stake 
RappiBacked by SoftBank, Rappi has aggressively pushed into the South American market, currently active in nine countries
Jumia FoodPart of the African e-commerce giant Jumia, which was the first African startup to be valued at over $1 billion 
Damae-CanJapan’s first choice for takeout, Damae-Can has over 20,000 restaurants and 2.3 million active users
iFoodBrazil’s most popular aggregator by a significant margin, accounting for over 70 percent of online takeaway orders in the country
ZomatoThe most popular of the homegrown food delivery apps in India, which acquired Uber Eats India in January 2020
Yandex.EdaAs Uber is not active in Russia, Yandex.Eda has been given free reign to all of the platform-to-consumer market

US Food Delivery App Market

US Food Delivery Revenue

YearRevenue
2015$8.7 billion
2016$10.4 billion
2017$13.7 billion
2018$16.8 billion
2019$22.0 billion
2020$26.5 billion

Market revenue has increased 204 percent in the past five years, powered by the introduction of platform-to-customer services, such as DoorDash, Uber Eats and Postmates, which are able to provide a wider selection of restaurants and food types.

US Food Delivery App Users

 

YearUsers
201566 million
201675 million
201781 million
201888 million
201995 million
2020111 million

Usage has also increased in the past five years, although not at the same pace as revenue. Grubhub already commanded a large audience before 2015, customers have migrated to newer platforms.

US Food Delivery App Market Share

Sources: CNBC, McKinsey, Second Measure, Statista

As we discussed previously, the food delivery market has been propelled forward by platform-to-consumer businesses, such as DoorDash and Uber Eats. Grubhub was the leader and through its acquisition of Seamless held a strong lead over rivals, but in the past two years it has been overtaken.

US Food Delivery App Projected Revenue

 

YearRevenue
2020$26 billion
2021$28 billion
2022$30 billion
2023$33 billion
2024$37 billion
2025$42 billion

The introduction of platform-to-consumer apps to more second and third tier cities in the US will add more potential revenue capture in the next few years. The COVID-19 pandemic has already propelled the industry forward, although some restaurants and workers may leave the industry once we return to normality.


 

UK Food Delivery App Market

UK Food Delivery App Revenue

 

YearRevenue
2015$2.6 billion
2016$3.2 billion
2017$3.5 billion
2018$4.2 billion
2019$4.8 billion
2020$5.9 billion

Revenue has increased in the UK as well, as Uber Eats and Deliveroo fight it out for platform-to-consumer supremacy. To counteract the growing interest in fast food delivery, Just Eat recently introduced its own delivery service, which includes partnerships with McDonalds, Subway and Greggs.

UK Food Delivery App Users

YearUsers
201513.6 million
201614.4 million
201715.5 million
201817.6 million
201919.9 million
202024.8 million

Usage has grown at a steady rate, elevated by the COVID-19 pandemic, in which millions of users tried food delivery apps for the first time.

UK Food Delivery App Market Share

Sources: AHDB, Deloitte, Just Eat 

Just Eat has dominated the UK market and in 2018 acquired the second largest aggregator, Hungry House. Uber Eats and Deliveroo have both posed a challenge for Just Eat, which it is attempting to rise to with the introduction of its own delivery service.

UK Food Delivery App Projected Revenue

YearRevenue
2020$5.9 billion
2021$6.5 billion
2022$7.2 billion
2023$7.9 billion
2024$8.6 billion
2025$9.4 billion

The platform-to-consumer model will expand in the coming years, led by Just Eat’s new delivery service. Uber Eats and Deliveroo have already opened up their platforms to accommodate third-party deliveries, we may see new innovations from both to attempt to compete with Just Eat.


 

Europe Food Delivery App Market

Europe Food Delivery App Revenue

YearRevenue
2015$6.6 billion
2016$7.4 billion
2017$9.5 billion
2018$11.0 billion
2019$14.3 billion
2020$18.9 billion

In comparison to US and UK, Europe has not seen the same level of innovation or competition. This is partly due to the smaller market size, for comparison the UK takeaway industry was as large as Spain, Italy and France combined in 2017.

Aggregators still rule the market in Europe and there hasn’t been as large of a push to platform-to-consumer operators, although Uber and Deliveroo have launched in several European countries in the past few years.

Europe Food Delivery App Users

YearUsers
201565 million
201680 million
201798 million
2018109 million
2019121 million
2020150 million

The deployment of Deliveroo and Uber Eats in key EU countries – France, Spain and Italy – has pushed active users to 150 million. We expect regional services, such as Glovo and Wolt, to receive more backing, similar to Zomato in India and iFood in Brazil, improving competition and providing customers with more options.

Europe Food Delivery App Market Share

Sources: Deloitte, Dealroom, Pitchbook 

Just Eat has held a commanding lead in Europe, as the lead aggregator in Spain, France, Italy and the UK. Uber Eats and Deliveroo both compete in the platform-to-consumer business, which Takeaway.com and Delivery Hero have adapted to slowly.

Consolidation of the European market, through the Just Eat-Takeaway.com merger, may stifle competition in the aggregation market. Delivery Hero, the main competitor in terms of size, appears more invested in Asian markets after selling off its German app to Takeaway.com.

Note: Just Eat and Takeaway.com merged in 2019 to form Just Eat Takeaway. 

Europe Food Delivery App Projected Revenue

 

YearRevenue
2020$18.9 billion
2021$20.5 billion
2022$23.0 billion
2023$24.6 billion
2024$26.2 billion
2025$29.1 billion

The merger of Just Eat and Takeaway.com may lead to further investment in European countries which are still in the formative years of developing online food delivery services. There is a worry that some countries will see withdrawals, due to lack of sales and interest, as we have seen with Uber’s recent decision to leave Czech Republic, Romania and Ukraine.


 

China Food Delivery App Market

China Food Delivery App Revenue

YearRevenue
2015$3.2 billion
2016$10.3 billion
2017$18.1 billion
2018$27.8 billion
2019$40.2 billion
2020$51.5 billion

Alibaba’s Ele.me and Meituan Dianping are the two largest food delivery apps in the world, each generating over $7 billion in revenue. Currently, revenue per user is lower than in the US and UK, but we may see that disparity lessen in the next few years.

China Food Delivery App Users

YearUsers
201575 million
2016150 million
2017250 million
2018400 million
2019550 million
2020650 million

While revenues are impressive, China’s food delivery users stats are astounding, far surpassing any other region. By moving straight to mobile, the roadblocks Just Eat and Grubhub had to face in the early days were not an issue for Ele.me and Meituan Dianping, which have built very sophisticated food delivery platforms.

China Food Delivery App Market Share

Sources: Daxue Consulting, Forbes, TechNode

China’s food delivery market is a two way battle financed by the two largest tech companies in the country: Tencent and Alibaba. Alibaba acquired Ele.me in 2018, while Tencent is the largest shareholder in Meituan Dianping, with a 20 percent stake in the company.

Note: Ele.me merged with Baidu’s Weibei and Koubei in 2017 and 2018, respectively, propelling them to over 50 percent market share.

China Food Delivery App Projected Revenue

YearRevenue
2020$51 billion
2021$63 billion
2022$70 billion
2023$78 billion
2024$88 billion
2025$100 billion

China leads the world in revenue generation through sheer size alone. In the next few years, we expect Alibaba and Meituan Dianping to introduce new features to improve revenue contribution per user.


 

Global Food Delivery App Market

Global Food Delivery App Revenue

Uber Eats, through the use of its global ridesharing platform, has been able to expand its platform-to-consumer business quickly. Just Eat Takeaway and Delivery Hero have amassed food delivery empires, through a growing list of subsidiaries.

Deliveroo and DoorDash are able to generate sizeable revenue through home markets, due to the significant size of UK and US food delivery market.

Meituan Dianping, responsible for over 40 percent of China’s online food delivery, generated more revenue in 2019 than any of the Western apps.

Note: This graph does not include Ele.me, the other Chinese food delivery service. From market share alone, we gather Ele.me may be generating upwards of $7 billion in revenue.

Global Food Delivery App Funding

There have been peaks and troughs over the past five years, dictated by how investors feel about the industry overall. In 2016, worries about profitability reduced investment to its lowest level since 2011.

Consolidation of the market in the US and Europe and market maturity will lead to less funding in the West, although South America, Africa and Asia are still ripe for investment.

Global Food Delivery App Projected Value

YearRevenue
2020$100 billion
2021$120 billion
2022$140 billion
2023$165 billion
2024$200 billion
2025$230 billion
2026$265 billion
2027$300 billion

We expect the next five years to be filled with more global consolidation, although some markets (India, South Korea) have bucked the trend and supplanted multi-national services, such as Uber Eats and Delivery Hero, with home grown apps.

If US-China relations improve, we may see Alibaba, Tencent and Didi attempt to shift the balance of power in the West in their favour, through acquisitions or major investments, similar to SoftBank’s investments in Uber, Didi and Rappi.

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