Online Food Delivery Market Size, Share, and Industry Analysis by Type (Platform-to-Consumers and Restaurants-to-Consumers), By Channel Type (Mobile Application and Website), By Payment Mode (Online Payment and Cash-on-Delivery), By Business Model (Grocery Delivery and Meal Delivery), and Regional Forecast, 2025-2032

The global online food delivery market is expanding, driven by key factors such as the growing consumer preference for convenience and the widespread adoption of digital platforms. Owing to their hectic lifestyles, customers are using online meal delivery services more frequently. The widespread use of cell phones and internet connectivity is further driving the online food delivery service demand.

The expanding digital sector in emerging nations such as India, China, and Brazil in urban areas is significantly driving the market. According to the India Brand Equity Foundation, the number of internet connections in India reached 895 million as of June 2023. Furthermore, IBEF claims Indian online grocery market is anticipated to grow by nearly 33% from 2012 to 2027. The emerging internet connections and online grocery services across the world are significantly driving the market.

ONLINE FOOD DELIVERY MARKET DRIVER

Increasing Nuclear Family and Population in Urban Cities to Drive the Market

Consumers today expect quick and convenient access to products and services, including food. Millennials and Gen-Z consumers are a key consumer base for online food delivery services. Adults, students, and nuclear families in urban cities for studies and jobs. These consumers opt to order food from restaurants and cafes for the convenience factor. Furthermore, increasing the nuclear family number in urban cities further affects the market growth. An increasing number of working women in developing countries significantly drives the online food delivery market. According to the Ministry of Statistics India, the labor force participation rate in urban areas above the age of 15 years and above has increased from 48.8% to 50.1% between April – June, 2023.

ONLINE FOOD DELIVERY MARKET RESTRAINT

High Operational Cost to Hamper the Market Growth

A potential restraint in the online food delivery market is the high cost of logistics and delivery operations. These costs can be challenging for companies to manage, particularly in maintaining profitability while offering competitive prices to consumers. However, continuous innovation and optimization of delivery processes can help mitigate these challenges over time.

ONLINE FOOD DELIVERY MARKET OPPORTUNITY

Technology Innovation to Drive the Market in the Upcoming Years

The expansion of services to rural and underserved areas presents a significant opportunity in the market. As urban markets become saturated, companies can tap into these regions by offering tailored services and localized cuisines. This expansion opens up new revenue streams and caters to a growing customer base that has been largely overlooked in the digital food delivery ecosystem. Furthermore, the shift in consumer behavior toward digitalization.

The integration of AI and machine learning in online food delivery apps has improved the user experience, making it easier for consumers to find personalized food recommendations. For example, AI-driven algorithms can suggest meals based on past orders, dietary preferences, or even current weather conditions, enhancing customer satisfaction and driving repeated use of these platforms. This technological advancement has made online food delivery more appealing to tech-savvy consumers, further propelling market expansion.

SEGMENTATION

ANALYSIS BY TYPE

Based on type, the market is divided into platform-to-consumers and restaurants-to-consumers.

The platform-to-consumer segment, where third-party delivery platforms connect consumers with a variety of restaurants, leads the online food delivery market. Companies such as Uber Eats and DoorDash dominate this segment, offering consumers the convenience of choosing from a wide range of restaurants in a single app. The flexibility and variety provided by these platforms have made them particularly popular in urban areas, where consumers seek diverse dining options delivered to their doorstep.

The restaurant-to-consumer segment, where restaurants manage their own delivery services, is the fastest-growing segment. This segment is growing, particularly among large restaurant chains that are developing their own delivery infrastructure to retain control over the customer experience. Brands such as Domino's and Pizza Hut invested heavily in their delivery services, attracting customers who prefer ordering directly from their favorite restaurants for more consistent and reliable service.

ANALYSIS BY CHANNEL TYPE

Based on channel type, the market is subdivided into mobile application and website.

The mobile application segment leads the online food delivery market, driven by their convenience and accessibility. Apps such as Swiggy and Grubhub have become the preferred method for ordering food due to their user-friendly interfaces and features such as real-time tracking and personalized recommendations. The widespread use of smartphones has made mobile apps the go-to platform for consumers, particularly among younger demographics who value efficiency and ease of use.

The website segment is one of the fastest-growing segments of the market, particularly appealing to older consumers who may prefer a larger screen and a more traditional browsing experience. While mobile apps dominate the market, websites are seeing an increased adoption among consumers who value detailed information and the ability to place complex orders more comfortably. Some consumers also prefer using websites for making group orders or when they are ordering from work or other locations where mobile app usage might be less convenient.

ANALYSIS BY PAYMENT MODE

Based on payment mode, the market is fragmented into online payment and cash-on-delivery.

The cash-on-delivery (COD) segment is the largest segment of the market, particularly in regions where digital payment infrastructure is still developing or where consumers prefer tangible transactions. Despite the increasing popularity of online payments, COD remains a popular option worldwide, where consumers are either cautious about online payments or lack access to digital banking services. The option of paying in cash upon delivery provides a sense of security for these consumers, contributing to the sustained growth of COD in the market.

The online payment segment is one of the fastest-growing segments of the online food delivery market, reflecting the growing preference for cashless transactions. The convenience and security of digital payments, combined with the integration of various payment gateways within delivery apps, have made online payments the dominant choice for consumers. Platforms such as Zomato and DoorDash support multiple payment options, including credit/debit cards, mobile wallets, and UPI, making the process seamless for users and encouraging them to choose online payments over traditional methods.

ANALYSIS BY BUSINESS MODEL

Based on business model, the market is subdivided into grocery delivery and meal delivery.

The meal delivery segment leads the online food delivery market, driven by the convenience of having prepared meals delivered directly to consumers' doors. Companies such as Uber Eats and Deliveroo excel in this space, catering to busy consumers who prefer ordering ready-to-eat meals rather than cooking at home. The popularity of meal delivery services is particularly high in urban areas, where the fast-paced lifestyle drives the demand for quick and easy meal solutions.

Grocery delivery is a rapidly growing business model within the online food delivery market, fueled by changing consumer habits and the increasing demand for home delivery of groceries. Platforms such as Instacart and Amazon Fresh have seen significant growth as more consumers choose to order groceries online, especially in the wake of the COVID-19 pandemic. The convenience of having groceries delivered, coupled with the growing trend of home cooking, has accelerated the adoption of this model, making it one of the fastest-growing segments in the market.

KEY MARKET PLAYERS

• Uber Eats (U.S.)


• Grubhub (U.S.)


• Door Dash (U.S.)


• Domino’s Pizza (U.S.)


• Just Eat Takeaway (Europe)


• Zomato (India)


• Food Panda (Singapore)


• Swiggy (India)


• Deliveroo (Europe)


• Postmates (U.S.)

KEY INDUSTRY DEVELOPMENT

• In May 2024, Amazon announced that its customers in the U.S. may place orders directly from hundreds of thousands of restaurants across all 50 states using Grubhub an American online and mobile prepared food ordering and delivery platform on Amazon.com and the Amazon Shopping app.


• In July 2023, the partnership between Domino's, an American multinational pizza restaurant chain, and Uber, an online food ordering and delivery platform, marked a major advancement in food delivery. This partnership allows Domino's to reach a wider customer base through Uber Eats and Postmates, making ordering Domino's pizzas more convenient than ever.