Convenience always stands as the top priority, whether in a pandemic or not. Every business is adopting the strategy to operate beyond its scope, to step up the competition in the industry, and to match the demand of customers' convenience. Restaurants, for instance, are expanding their food delivery services, and thus new delivery concepts like food ordering and delivery platforms are cropping up at a fast pace.
Many restaurants that signed up for online food deliveries in partnership with food delivery aggregators saw a huge spike in their order size and revenues. The surge in the adoption of food delivery platforms, especially during and in the aftermath of the pandemic has led to the entry of many players in this industry and is creating stiff competition. Good customer service, price differentiation, discounts, and better food quality are key differentiators for the competing platforms, both incumbents and new entrants. The industry also faces challenges pertaining to profitability, partnership challenges with restaurants, retention, and training of delivery agents, etc.
This research titled: ‘Food Ordering and Delivery Platforms - Market, Trends and Opportunities’ by GoodFirms analyzes the market dynamics, customer perceptions, preferences, significant players, current trends, and opportunities in the food ordering and delivery industry.
GoodFirms conducted an online survey between 5th June 2022 and 21st June 2022. A total of 680 responses were collected. Participants from all over the world shared their online food preferences including consideration factors, popular platforms, etc. for placing their food orders. They desired changes in their preferred food ordering and delivery platforms. This research brings valuable insights into how the online food ordering culture is evolving and what the future holds for this industry.
Table of Contents:
- #Delivery Time and Service Quality Play a Pivotal Role in the Selection of Any Platform
- #Discounts and Offers Hugely Attract Consumers
- #Quality of the food heavily influences the Mindset of People
- #Ratings and Reviews are Crucial in Telling a Positive Customer Experience
- #Social Influence is a Critical Factor in Choosing a Platform
- #Self Research and Comparison Guides Online Food Order Choices
- #Consumers Focus on the Features of the Platform During Selection
- #Availability of Multiple Payment Options is Crucial in Preventing Cart Abandonment
- #Focusing on Additional Factors Like Cost, Packaging, and Platform Size are advantageous
- #Mobile App Emerges as the First Choice for Order Placement
- #Growing Usage of Social Media for Brand Awareness
- #Subscription-based Models are Growing
- #Tapping New Channels for Order Placement and Delivery
- #Real-Time Tracking and Notifications
- #Multiple Payment Methods for Hassle-Free Payments
- #Cloud/Ghost Kitchens are the Latest Trend
- #Consumers prefer Cashless Payments
- For Delivery Partners
- For Restaurant Partners
- For Food Ordering and Delivery Platforms
- For Consumers
Food ordering and delivery platforms like UberEats, Deliveroo, Zomato, etc., have reduced the distance between restaurants and consumers. With new technological features, increased focus on customer service, and expanded digital capabilities, the platform-to-consumer delivery business has shown tremendous growth in revenue and user base. With the global economic recoveries after the pandemic and further technological reforms, food ordering and delivery platforms are poised to achieve new milestones and growth in these upcoming years. However, margin pressures are still there due to heavy discounts and offer for new customer onboarding and retention. Other severe challenges prevalent in the industry are associated with order placement, late deliveries, the unavailability of multiple payment methods, etc.
Despite the challenges, online food ordering and delivery platforms are ramping up their service infrastructure in terms of technological integrations, hiring new employees, increasing flexibility, etc. The food ordering and delivery platforms are using the latest technologies to increase business flexibility, reduce operating costs, optimize delivery routes, and improve customer experience. In addition, technologies like artificial intelligence, blockchain, etc. are game-changer when used correctly.
This survey by GoodFirms titled: ‘Food Ordering and Delivering Platforms - Market, Trends, and Opportunities’ attempts to identify and analyze the current trends, consumer preferences, and industry players of the global food ordering and delivery market. In addition, this research also aims to explore the challenges impacting the ‘service delivery’ of restaurant partners, delivery partners, consumers, and platforms. The research aims to help food order and delivery companies and allied restaurant partners in getting valuable insights to scale their business further and attain a more profitable regime.
Food Ordering and Delivery Platforms: Market Outlook
The global food ordering and delivery market has become worth more than $150 billion, and the valuations have tripled since 2017.(1) This growth has been driven by a variety of factors, including increasing consumer demand for convenience and speed, as well as technological advances such as smartphone apps and online ordering tools that have made it easier for customers to find and order food. In addition, the rise in popularity of meal-kit services has also contributed to the growth of this industry.
The Covid-19 pandemic almost halted online food ordering, and the delivery industry and demand for food through online platforms became minimal. This reduction was driven partly by insecurity and safety precautions of consumers to avoid spreading the virus and closed restaurants during the peak-pandemic scenario. However, as the pandemic slowed down, food delivery services again began showing growth in their orders.
Most food delivery companies have got significant investments from core investor groups to build and strengthen their economic structure and scale their operations. However, many have plunged into losses, and many others haven’t even posted their single quarterly profit since inception. The growth is uneven. For those who are posting continuous losses, delivery agents’ compensation, massive discounts, marketing, and advertising spending have been the top detriments to profitability. Regulatory woes and discontent among restaurant owners have further damaged the already low-margin business for many.
However, some bright players such as Doordash, JustEat, Grubhub, UberEats, etc. have addressed their operational issues efficiently and are highly successful in this industry with a huge customer base and market share.
Major Players in the Online Food Ordering and Delivery Market
The food delivery and ordering platforms have seen significant growth in the last few years. From startups to tech giants, a considerable number of companies are involved in the food ordering and delivery market.
The key global players in the online food ordering and delivery market are:
In Latin American Markets, 24% of the respondents Prefer to order from JustEat Takeaway
The takeaway giant is a Dutch food ordering and delivery platform that merged with JustEat, a London-based food ordering platform, in 2020, forming JustEat Takeaway.(2) The organization is currently operating in more than 20 countries with the assistance of different local food delivery platforms and restaurant partners.(3) The company is taking orders from its application and website to serve customers across different countries.
In European and Latin American Countries, 22.1% of the respondents Prefer to order food using Uber Eats
Uber is an American mobility service provider that launched UberEats - an online food ordering platform, in 2014. Ubereats is currently serving consumers in 6,000 cities in over 45 countries.(4) The company uses web browsers and android/IOS applications for taking and delivering orders. Ubereats provides a wide range of features such as reading menus, giving ratings/reviews, placing orders, paying online, etc.
In SouthEast Asia, Nearly 20.6% of the surveyees Prefer to Order Food Using Foodpanda - the Online and Food Delivery Platform
Foodpanda is among the most popular food ordering and delivery platforms in Asian Region. It is the lead brand of Delivery Hero in Asia, with headquarters in Singapore. Foodpanda operates in more than 12 Asian countries and is the largest food delivery platform outside of Indian and Chinese markets. With over 115,000+ partner restaurants and 80,000+ delivery partners,(5) Foodpanda provides seamless services to the consumer through mobile applications and its website.
Deliveroo is the preferred choice of 15% of surveyees in the European and Sub Asian continent
Deliveroo is a British online food delivery platform headquartered in London, UK. Business is engaged in serving customers in over 800 cities and towns across 12 major markets, such as UAE, UK, Kuwait, Australia, HongKong, Italy, etc.(6) Additional subsidiaries of Deliveroo, such as Deliveroo Editions, are focused on streamlining the supply chain and delivery through their growing networks of ghost or takeaways restaurants.
GrubHub is the preferred food delivery platform by 16.2% of surveyees
Grubhub is an American firm based in Chicago, Illinois. The company has been active in online food ordering and delivery since 2004. The company had over 31 million active users as of 2020.(7) In 2020, Grubhub was acquired by JustEat Takeaway in a deal worth $7.3 billion.(8)
15% of Surveyees use DoorDash as their preferred food ordering and delivery platform
Headquartered in San Francisco, California, it is the largest food delivery organization in the USA. It covers around 56% market share in America with over 20 million customer base.(9) The company also has a robust supply chain of 1 million delivery partners and 450,000 restaurant partners to ensure continuous delivery of orders. DoorDash also provides services in a few other countries, such as Japan, Germany, Canada, Australia, etc. The organization is highly focused on technology, due to which it has acquired several startups focused on autonomous delivery, food preparation robots, etc.
19.9% Order Food through Zomato in Sub Indian continent
Zomato is an Indian Food ordering and delivery platform founded in 2008. It is India's largest online food ordering platform, providing services in around 100 cities in 19 countries.(10) Zomato provides menus, information, and reviews of its partner restaurants through its application and website. It has acquired several restaurants and startups to provide its services in more regions without hassle. Recently, Zomato came with a “10-min delivery” to deliver the orders within the shortest possible time. Swiggy is another giant from the Sub-Indian continent with a huge customer base and market share. Swiggy is serving multiple cities in India through its online application and website.
8.8% prefer Delivery Hero for placing their online food orders
Delivery Hero is a Germany-based online food ordering and delivery platform active in Asia, Latin America, Europe, and the Middle East. With over 500,000+ restaurant partners, Delivery Hero serves its consumers in over 50 countries.(11) It is one of the leading players in global food ordering and delivery platforms, attracting a considerable number of investors and customers. It also acquired several small regional players in the UK, Sweden, Greece, Hungry, etc., to ensure smooth order delivery and an increased customer base.
Postmates is the preferred choice of 14.7% of respondents
Postmates is another mid-range food ordering and delivery platform based in San Francisco, California. Founded in 2011, the company was engaged in serving more than 2,900 cities across America before merging with Uber in 2020.(12) Unlimited free delivery subscription of Postmates is allowing customers to get free delivery on their orders, hence profiting the organization.
Major Markets for Food Ordering and Delivery Platforms
United States of America
The USA is one of the behemoth markets for online food delivery services. Since the launch of the first online food ordering services from World Wide Waiter in 1995, food ordering and delivery platforms have become a billion-dollar business. In addition, US food ordering companies like UberEats, Doordash, GrubHub, etc., have become global players due to their attractive restaurant commission rates and reliable infrastructure solutions. Most consumers of these companies are adults earning a decent income with a good lifestyle standard. Moreover, growth in urban areas, user-friendly applications, and innovative food delivery services are some more factors behind the booming growth of online food ordering in the USA.
The United Kingdom
The United Kingdom is another big online food ordering and delivery platform market. Convenience is a leading driver behind this massive UK market for food ordering platforms. Deliveroo, JustEat, UberEats, etc., are dominating this market due to their lower commission rates, discounts, and meal delivery facilitation. In addition, demand for takeaways and eating at home also allow the food delivery platforms to grow. The food ordering and delivery market declined during the pandemic, but with the reduced cases of Covid, the demand for food ordering platforms may arise in the future.
With over a billion population, the Indian market is another giant in online food ordering and delivery. The growth of food ordering and delivery platforms in India is driven by several factors, such as access to high-speed internet, an increase in the sales of mobiles, inflating income levels, and a growing working population. Although the main focus is on urban areas, mainly Delhi, Mumbai, and Bangalore, the demand and services for these platforms are also increasing in tier 2 and tier 3 cities due to growth potential. Ready-to-eat and convenience are also leading to the growth of online food ordering platforms in the Indian region. Zomato, Swiggy, Faasos, etc. are some well-known food ordering platforms in India.
Online food delivery has been rapidly growing in China in recent years due to the extensive population and industrialization. The food ordering and delivery market in China covers a considerable number of mobile phone users and employs a large population. The leading platforms in China are Ele.me, Baidu Waimai, and Meituan, which cover most of the region. Low skill requirements, time flexibility, and high income are promising factors for growth. However, food and plastic waste, the government’s new regulations, and violations of labor rights threaten the platforms and their functioning.
Saudi Arabia is another primary market for online food ordering platforms, which is growing with the growth in digital or e-commerce transactions. It is also the largest market for food ordering and delivery platforms in North Africa and the Middle East region. This tremendous growth results from a hectic schedule, changing working environment, and growth in the working and young population. Companies like Talabat, UberEats, Deliveroo, etc., are leading players in Saudi Arabia with an extreme focus on user convenience.
Consumer Perception and Buying Behavior:
Online ordering and delivery services operate in a complex environment. As consumers continue to embrace online ordering and delivery as an option, they are also becoming more discerning. GoodFirms' survey revealed valuable insights regarding consumer preferences and buying behavior pertaining to online food ordering.
30.9% of surveyees report a slight increase in online food ordering after the pandemic.
Generally, convenience is a major reason behind increased online food ordering. As busy professionals and job commuters are back to offices, it is convenient for them to order food rather than prepare it. Also, half of the expense of ordering food is compensated by the reduction in grocery basket size.
36.8% are highly satisfied with the online food platforms they use.
Post-pandemic food ordering and delivery platforms industry is booming as consumers are again shifting to online ordering for convenience. 36.8% reported high satisfaction with online food delivery services while 22.1% are neutral about the services. Only 13.4% expressed dissatisfaction with online food delivery companies. There is a rise of new platforms that desire to serve customers exceptionally, and become prominent players in the global food ordering and delivery industry. This has largely contributed to the high customer satisfaction metrics uncovered in our research.
25% of GoodFirms' research respondents stated ordering their favorite food online twice a week.
Many factors contribute to twice-a-week online food ordering. One major factor is economic stability in the high and middle-income groups. Such people often order food online instead of cooking it. Another factor is the large number of corporate people living in other cities who do not have time to cook their food. Such people also usually order online instead of cooking their food every day. The third factor is the people who desire a change in their food or taste instead of eating home-cooked food regularly.
People in the age group 25-39 tend to order online twice a week so that they can taste both home-cooked and online food throughout the week.
22% of surveyees stated that they order food twice a day from online food ordering and delivery platforms.
The majority of these respondents belong to the age group 18-24, who are students and job freshers. They mostly do not have access to home-cooked food. Such people also lack cooking skills and expertise, so they like online food instead of cooking. Some people in the age group 25-39 also prefer to order food online twice a day due to their taste preferences.
14.7% said they order food every second day from their preferred food ordering and delivery platforms.
Most such consumers include young people from both the 18-24 and 25-39 age groups. Convenience is the primary factor in which consumers stay eager to order food online instead of going out or cooking themselves.
Most Ordered Type/Consumers’ Preferences
47.1% order American Food through online ordering platforms
American food is the most ordered food type through online ordering platforms. Some prefer barbeques and whereas the midwest likes casserole. American food typically comes in two types: simple flavors and cultural fusions.
35.3% and 13.2% prefer Fast Food and Beverages on online platforms
Fast food and beverages are also the most ordered food types globally as they come with great taste and are considered inexpensive. Consumers prefer pizzas and burgers, along with soft drinks and juices. With these food types, customers can expect faster delivery owing to quick preparation time. In addition, not many utensils and cutlery are required while eating and drinking.
23.5% responded Chinese as their preferred food
Herbs, spices, and lots of sauces, Chinese food is the choice of 23.5% respondents. Noodles, Barbecue, tea-based drinks, desserts Mala Tang, etc. are some frequently ordered Chinese dishes.(13)
22% love to order typical Indian food
Indian food is typically known for its rich diet, including minerals, vitamins, etc. In addition, some Indian food curries have health benefits, such as metabolism improvements, weight gain, etc. Indian food even includes some herbs and spices, such as bay leaves, asafetida, carom seeds, cumin seeds, etc., to make it rich in taste also. They are easy to prepare and full of diversity. Not only in India, but Indian food is also loved by people all over the globe.
8.8% order Mexican Cuisines when it comes to online food ordering
Mexican food is also popular among people due to its massive variety of flavors. Mexican food combines ingredients from different cultures to make healthy recipes. Chile peppers and nopalitos are the most common ingredients in Mexican cuisines, particularly in tacos, salads, and some side dishes. In addition, this food also includes desserts like cornbread, churros, and sweet tamales.
Top Factors Considered in Choosing Online Food Ordering and Delivery Platforms
The key factors that consumers consider when choosing an online food ordering and delivery platform include convenience, delivery charges, discounts and offers, payment options, cuisine, customer reviews, reasonable cost, etc.
GoodFirms’ survey revealed the below factors that determine the selection of a particular platform for ordering online food:
#Delivery Time and Service Quality Play a Pivotal Role in the Selection of Any Platform
38.2% consider delivery time and service quality as the main factors in ordering food online
Service quality plays an integral role in customer satisfaction and retention. On-time delivery is crucial to ensure that customers get their orders at the right time without any delays. Delivery on or before the estimated time gratifies the consumer’s interest which assists in acquiring more orders for delivery. In addition, shorter delivery time is a key performance measure for determining the level of service quality of any platform.
#Discounts and Offers Hugely Attract Consumers
33.8% look for discounts and offers before selecting their food online
Discounts and offers by online food ordering platforms also attract consumers to purchase from a specific platform. Such offers and discounts greatly help consumers in saving money monthly. In addition, discounts and rewards based on current events and seasons are crucial in assisting customers to save more money.
#Quality of the food heavily influences the Mindset of People
32.4% prefer the quality of food in choosing their favorite online food
Maintaining quality must be the primary concern for businesses in the food ordering and delivery industry. The speed at which the food is prepared and delivered to consumers matters, but if the food doesn’t taste good, it all goes to waste. Customers tend to pay extra if they know the quality of the food is above everyone else. Good quality food also assists in retaining customers for an extended time as it leaves an everlasting impression on the customers. With quality restaurant partners online delivery businesses can attract more customers by serving the top quality food.
#Self Research and Comparison Guides Online Food Order Choices
17.6% conduct their research before ordering food online.
Some undertake self-research and comparison between different food ordering platforms to decide on the best in terms of meal size, costs, delivery time, food reviews, etc. Businesses should focus on building a good and positive image in terms of physical and virtual presence, which helps target such customers who conduct their research.
#Consumers Focus on the Features of the Platform During Selection
14.7% check the features of the platforms before deciding to order online food.
Another reason for ordering online food is the platform’s features. Push notifications, real-time tracking, custom settings, etc. are some popular features used by food ordering platforms. Also, these features attract consumers in indulging with the food ordering platforms.
#Availability of Multiple Payment Options is Crucial in Preventing Cart Abandonment
10.3% prefer multiple payment options to pay as per their convenience.
This is another major factor that helps customers choose the services of any food ordering and delivery platform. The availability of multiple payment options helps add a smooth shopping experience for the customers. This helps in reducing the chances of cart abandonment and increasing customer loyalty. With multiple payment options, customers tend to keep using the platforms as they can pay through numerous systems such as cash on delivery, debit cards, credit cards, e-wallets, etc.
#Focusing on Additional Factors Like Cost, Packaging, and Platform Size are advantageous
8% consider factors like cost, packaging, and brand size in online food ordering.
Cost is one of the most influential factors people consider when ordering through any platform. Cart abandonment occurs if prices are high and food quality is low. In addition, the packaging of the food products is also crucial to attract customers to the products. People also look out for the size of the restaurant, i.e., dine-in, only takeaways, etc., to determine the quality of food and services.
Current Trends in Food Ordering and Delivery Platforms
#Mobile App Emerges as the First Choice for Order Placement
58.8% of surveyees of GoodFirms’ survey stated that they use mobile applications for placing an order.
Digitalization has contributed much to the growth of online food ordering and delivery platforms. When it comes to ordering food online, mobile applications are preferred by a vast number of people. Some platforms still use their website for order placement, whereas most platforms use mobile applications for order placement and delivery. Mobile applications serve several purposes such as convenience, better UI/UX, etc., which are beneficial for both platforms and their consumers.
13.2% use the website for order placement, and 27.9% use both mobile apps and websites for food order placements.
#Growing Usage of Social Media for Brand Awareness
Since brand image, reputation, and awareness play an important role in the selection of any online food ordering platform, it becomes essential for them to have proper marketing and promotional strategies to impact the consumers' mindset positively. Due to this positive impact, people also recommend their preferred brands to others, which helps in business growth. Most food ordering and delivery platforms use social media platforms to enhance their brand awareness among consumers.
#Subscription-based Models are Growing
22.1% prefer a subscription for ordering multiple meals throughout the week.
Over the last few years, various food ordering and delivery platforms have introduced subscription-based services for their customers. Several subscription-based services of food ordering platforms are already trending in the market, such as Eats Pass, Zomato Pro, Deliveroo Plus, etc. With these premium subscriptions, consumers can avail of benefits such as discounts, free dine-outs, free deliveries, rewards, etc., on their orders in return for a nominal monthly payment. In addition, some of the organizations have also partnered with other corporations to provide vouchers and membership programs from the subscription.
#Tapping New Channels for Order Placement and Delivery
Platforms are looking for new channels through which consumers can place their orders. Mobile phones are standard at present, but the growth of other technologies and devices such as wearables, vehicles, voice assistants, etc. Since users cannot use their mobile devices 24*7, the platforms allow consumers to place their orders from Smartwatches, car dashboards, etc., to smoothen the order placement process. Also, new delivery channels are arising rapidly in delivering food through robots, drones, etc.
“Due to the pandemic, not everyone wants to eat in a restaurant. Delivery in answering this change in consumer behavior. Ordering online, via tweet or smartwatch, and picking up lunch or dinner on the way home will dominate the marketplace,” says Andy, Owner, and Partner at Traversebay Farms.
#Real-Time Tracking and Notifications
Real-time notifications associated with refunds, orders, and delivery
Customers at present prefer real-time updates regarding their orders, which is also a significant trend that allows food ordering and delivery platforms to serve the demands of their customers efficiently. Real-time tracking and notifications are beneficial for both consumers and platforms to acquire various types of critical information such as estimated time of arrival, efficient routes, the current location of delivery partners, etc. Such information is vital in improving the order completion process and reducing the traveling expenses of partners. Real-time tracking also drives customer satisfaction.
#Multiple Payment Methods for Hassle-Free Payments
22.1% dropped their order when they could not find multiple payment options for their orders.
Almost all major food ordering platforms provide their customers with multiple payment options. This allows the platforms to acquire and retain customers that can leave the platform due to the unavailability of diverse options. Numerous payment options not only provide convenience to the customers but also helps in acquiring more orders. The majority of the multiple payment systems, which people widely use, include debit cards, credit cards, digital wallets, online net banking, etc.
#Cloud/Ghost Kitchens are the Latest Trend
Ghost/Cloud kitchens are trending and rapidly growing in numbers throughout the world. They are used for online delivery or takeaways instead of serving customers directly at restaurants through dine-in. Such kitchens are found in areas with heavy consumer demand and little space. Cloud and Ghost kitchens are cost-effective as they take less space and furniture with fewer employees.
#Consumers prefer Cashless Payments
95.6% of surveyees use Cashless payments to pay for their food orders.
Global preferences are changing when it comes to payments. Overall, 41.2% of GoodFirms’ survey respondents are using Digital wallets to pay their orders and bills. Many reasons contribute to this high usage, such as digital records of payments, saving time, elimination of risk associated with managing paper bills, slips, etc. Some popular digital wallets are Google Pay, Apple Pay, Paypal, etc. Low-value transactions are usually done through digital wallets.
“One of the biggest trends we are now seeing is the rise of digital wallets, as they are starting to compete with contactless cards, with many consumers now firmly transitioning towards mobile payments”, says Kathleen Ahmmed, co-founder at USCarJunker.
Debit cards come in different types, such as Mastercard, Visa, RuPay, etc. Debit cards are used by 23.5% as their preferred delivery method instead of carrying cash. The debit card allows real-time settlements, no location bar, and easy payment status tracking.
Online net banking is advantageous for consumers in easily and simply paying their bills, 24*7 account access, better access to bank records, discounts by banks, etc. 17.6% prefer paying online net banking for their food-related transactions. Nowadays, online banking is convenient for users as they don’t have to physically visit the banks for their queries; instead, they get the solutions while sitting at home.
5.9% of respondents use credit cards to pay their online food bills. Payments made via credit cards for high-value transactions appear to be feasible. Consumers who order bulk food for their groups use credit cards to pay their bills. In addition, credit cards allow the conversion of bills into small EMIs.
Apart from digital wallets, and debit and credit cards, people are using other payment modes also, such as UPI. Only a small percentage of respondents, i.e. 4.4%, are using and prefer payments through cash on delivery.
Challenges Faced by Food Ordering and Delivery Industry Stakeholders
Food delivery platforms are all the rage right now. However, all stakeholders in the food order and delivery industry face specific sets of challenges while operating their business. Some of the challenges are:
For Delivery Partners
- Ensuring on-time deliveries while coping with the delivery challenges is a major task for the delivery partners. While delivering the order, delivery partners face several issues associated with vehicles, traffic, weather, and law officials. Issues such as running out of fuel, long traffic, tire punctures, device failure, etc., results in late delivery.
- The delivery partners also experience challenges associated with unprofessional and arrogant customers in some cases and regions. In some cases, customers did not find the services unsatisfactory, due to which the delivery partners become victims of abuse from customers to gain benefits like free food.
- Order and Vehicle theft are also common challenges for delivery partners. The delivery partners use two-wheelers, due to which robbers usually target them for robbing and taking their orders.
- The delivery partners also experience issues maintaining the food quality and taste while delivering long-distance orders.
For Restaurant Partners
- Insufficient staff during peak hours is a majorly experienced challenge for restaurants due to high and unexpected demand during weekends, festivals, events, etc. In addition, the restaurant partners also need to ensure that they are handing proper orders to the assigned delivery partners, which is difficult during peak hours or heavy demand. Existing staff can handle the orders at regular flow but experience issues while handling them at peak hours.
- Maintaining taste and quality is another major challenge by the restaurant in order to ensure better service and reviews for continuous orders. Taste and food quality are the most considered parameters in choosing any restaurant from a platform due to which it is very vital to ensure the same quality.
- Food safety is a key concern for any restaurant. The restaurants make food in huge quantities and varieties. They are responsible for ensuring the safety and temperature of the food until it is handed over to the delivery partners. The restaurant management needs to maintain the quality of food so that customers can get it as they desire.
For Food Ordering and Delivery Platforms
- Dynamic customer preferences are occasionally one of the most prominent challenges food ordering and delivery platforms face. Customers’ preferences keep changing with the new trends and environmental awareness, which isn’t easy to resolve. More research and investments are needed to determine these dynamic habits and ensure platforms meet users' changing needs and perceptions.
- The growing competition among businesses is a significant challenge for food ordering and delivery platforms as multiple companies with huge investments and funding are now entering the market. In addition, these businesses are also utilizing new technologies in their operations and services, posing threats to their existing competitors.
- The platforms need to ensure that their mobile applications and website are compatible with the different types of devices so that every user can install and order from them. In addition, ensuring multiple payments and delivery options is also critical for any platform in order to ensure zero card abandonment.
- Online food ordering platforms also experience challenges associated with improper mapping and maintaining offline access facilities so that customers can order when the internet is not working properly. There is a dire need to properly map the resources and infrastructure along with introducing an offline access facility.
- Privacy and data protection is a significant challenge for consumers as sensitive financial and identity information is entered on the platforms, which can be used for unauthorized activities if food ordering platforms do not take proper measures.
- Food tampering and safety are also critical concerns of consumers when ordering food online. Most consumers tend to worry about their food being tampered with during delivery. 33.8% of respondents worry about food tampering during packaging and delivery through partners.
- High costs during peak hours, such as late-night hours, bad weather, events, and festivals, are also experienced by consumers, significantly impacting the online ordering process.
- Order cancellations are common among consumers who seek a simple cancellation process along with automatic refunds. However, not all platforms have a simpler cancellation process which poses a major problem.
- Customers also face issues associated with payments such as delays in payments, unavailability of multiple payment options, etc. which also hampers their experience.
- 7.4% believe that food ordering through online platforms is a costly affair.
Future Opportunities in Food Ordering and Delivery Platforms
#Integrating Drones and Robots in Supply Chain for 24*7 delivery
Many food ordering and delivery platforms currently say that they are providing their services 24*7. However, this isn’t true in several cases, such as during late nights or when the weather is not good. There is a dire need for food ordering and delivery platforms to introduce new delivery mediums that can deliver orders 24*7 without any food tampering issues.
16.2% of respondents agreed that they want their products delivered through robots and drones. Delivery through drones, robots, and autonomous vehicles is a beautiful idea while providing food orders in extreme weather conditions. 33.8% of surveyees always worry about their food being tampered with during delivery. Delivery through drones and robots can prevent such problems as they are machines and cannot tamper with the order themselves.
#Strong Focus on Customer Satisfaction and Experience
As per GoodFirms' survey, 35.3% avoid ordering from platforms with poor customer service and food quality. This satisfaction level should be increased to acquire more market share and customers.
Platforms use different strategies and policies to ensure a pleasant customer experience and satisfaction. However, consumers and partners still encounter various issues in order placement, selection, and delivery, contributing to low customer satisfaction and experience. 11.8% of respondents stated that they received cold meals due to late delivery or the massive distance between the restaurant and delivery location. There is a strict need to optimize the ordering, payment, and delivery processes so that consumers can face fewer issues for a better experience.
For platforms, restaurant owners are partners as well as clients. Any discontent among restaurant owners can adversely affect the delivery platform’s business prospects. There is a need to strategize on this front too. UberEats has a working strategy. For instance, they charge upto 30% when there are more than 25 orders; else 0% fee is applicable.(14). If the restaurant partners did not get enough orders, they do not have to pay fees to the platform.
Forward-looking food ordering platforms can grasp multiple opportunities by intensely focusing on customer satisfaction and experience.
#Utilizing Latest Technologies Such as AI-based recommendations and Virtual Assistants
20.6% use suggested recommendations when they can’t decide.
While ordering food online, most customers face issues in selecting their food. Such issues must be resolved using proper recommendations and suggestions. For this, technologies like artificial intelligence, big data, and machine learning must be appropriately implemented in mobile applications and websites.
26.5% of respondents stated that they would like to see virtual assistants during their food ordering process.
Virtual assistants can positively impact businesses in operations, supply chain, customer service, etc. Virtual assistants can help suggest relevant food products based on history, plan the meals, guide consumers, solve customer queries in real-time, etc. which will open new opportunities for the platforms in terms of more business and customer base. Just Eat Takeaways is using AI and machine learning for their customer support through which robots powered by virtual assistant technology solve the issues of consumers.(15)
#Custom Menu Engineering
32.4% of surveyees desire customized food delivery through their preferred platform.
Custom menu engineering can also open up new opportunities for the food ordering and delivery platforms as the customer often prefers the suggestions based on their previous orders. These platforms can provide custom menus to consumers using their existing data, improving sales, conversion rates, and total order values. In addition, end-to-end customization is also beneficial for platforms in ensuring that recommendations are accurate and consumers' allergies and other health conditions are considered in developing custom menus.
#Hiring New Partners/Employees or Skill Development of Existing Ones
38.2% of respondents firmly talk about the need to hire talented and skilled partners in customer service, delivery, etc.
Almost everything is becoming online, but not all can easily use this system due to improper understanding, insufficient knowledge, etc. One of the significant issues consumers encounter during food ordering is untrained or unprofessional delivery and restaurant partners. Such partners negatively influence the customer perception and ordering decisions which also impact revenue and growth.
11.8% receive cold meals most of the time due to irregular delivery distance and time. Such issues can be prevented by adequately training existing delivery partners or hiring trained delivery professionals. They can also employ regional people so that the delivery partners can be aware of short routes and avoid traffic to prevent late deliveries.
36.8% tend to avoid ordering food online when the ordering process is complex or lengthy. The office employees develop the ordering process, so it is also essential to have knowledgeable and experienced employees. Training should be provided to new employees or hiring new multi-talented employees so that the ordering process can be streamlined by using new technologies and development platforms.
#Developing Countries have Enormous Opportunities
There is already stiff competition among online food ordering and delivery platforms in developed countries like the US, UK, UAE, etc. These online food delivery platforms are expanding in developing countries to reach more audiences. Massive growth opportunities lie for platforms to reach remote areas where demand for home-cooked food is high, i.e., in developing countries. Giants like UberEats, Zomato, Just Eat Takeaway, and FoodPanda are now expanding their businesses in developing countries with emerging markets to grasp these opportunities.
“The future opportunities in the food ordering and delivery market include the growth of the express food delivery segment, the increasing demand for home-cooked food, and the growth of the food delivery market in developing countries,” says Simon Courtney, Business editor, Healthcare Business Tech.
#A Plea for Eco-Friendly and Plastic-free Industry
41.2% of respondents want to see eco-friendly and plastic-free packaging in their food products.
Consumers currently are becoming health conscious and prefer to stay environmentally friendly. They tend to avoid using plastic in their orders and desire eco-friendly packaging that does not harm the environment. 17.6% of those who participated in the survey said that they do not find the packaging of the products satisfactory. Using plastic-free and eco-friendly packaging can improve the satisfaction level of such people. Zomato, an online food ordering and delivery platform in the Asian region has started eco-friendly packaging which is provided to restaurant partners.(16) They aim to eliminate the use of plastic in their packaging by the end of 2022.
- The majority of people are not fully satisfied with their frequently used platform.
- 30.9% observed a slight increase in their online ordering habits after the pandemic.
- 25% between the age group of 25-39 order their favorite food twice a week.
- American food is the most ordered food type on online food ordering platforms.
- Delivery time and service quality are the most considered factors in ordering online food.
- Few people tend to drop their orders due to the unavailability of multiple payment methods.
- Just Eat, Takeaway and UberEats are preferred across Latin American and European countries.
- Zomato and Swiggy are significant players in the sub-Indian continent.
- The USA, UK, and China are the top three online food ordering and delivery markets.
- Mobile applications are the most popular medium for placing food-related orders compared to websites.
- Premium subscription users are rapidly increasing due to their rewards and savings.
- Cloud and Ghost Kitchens, for only takeaways, are increasing to serve online consumers.
- People prefer cashless payments, and digital wallets are primarily used for paying online food bills.
- Delivery partners experience numerous vehicle fuel issues, traffic, congested streets, weather, etc.
- Restaurant partners mostly experience issues maintaining food quality and staff availability during peak hours.
- Consumers experience problems ranging from food tampering to the wrong user interface of the platform.
- Food ordering and delivery platforms are experiencing issues maintaining the taste and handling dynamic customer expectations.
- New order placement and delivery channels are the preferred changes consumers expect from their platforms.
- The latest technologies can positively impact businesses in efficiently managing operations, supply chain, customer service, virtual assistance for consumers, etc.
- Improving product quality and features are critical to the growth of food-based businesses.
The food ordering and delivery industry is expected to undergo a transformational process in the upcoming time due to the rise and integration of new technologies in the business processes. Fulfillment of customer expectations while not pressuring the restaurants and delivery partners is a crucial factor for attaining success in the market. Despite the challenges, the food ordering and delivery platforms are increasing rapidly. From hiring new partners and employees, streamlining the processes, to adding new features to mobile apps, various new steps are being taken by food ordering platforms to ensure exceptional services.
The technological integrations of artificial intelligence, machine learning, etc. in business operations are further addressing the issues of rapidly changing customer preferences. Such technologies are playing a pivotal role in enhancing customer experience and satisfaction. In addition, these technologies are also making ordering, delivering, cancellation, and refund processes easier and simpler.
We sincerely thank our Research Partners who participated in the survey.