The rise of food delivery platforms has significantly reshaped the competitive landscape of the sector, according to GlobalData, a leading data and analytics company.
The COVID-19 pandemic accelerated the growth of food delivery, a trend that has sustained consumer interest.
This has empowered smaller operators to reach a wider customer base without the need to invest heavily in logistics infrastructure and compete directly with larger brands, it said.
“Large foodservice chains possess an edge due to their strong branding and advertising efforts, leading to higher brand recall among consumers,” said Bokkala Parthasaradhi Reddy, lead consumer analyst at GlobalData.
“Furthermore, established loyalty programs contribute to better consumer engagement. Delivery plays a crucial role, particularly for quick-service restaurants (QSRs), as exemplified by Domino’s leading market position in many regions. However, the emergence of food delivery platforms is mitigating these advantages, especially the delivery edge,” said Reddy.
Deepak Nautiyal, consumer and retail commercial director, APAC and ME, GlobalData, said: “Food delivery platforms such as FoodPanda, Grab, Swiggy and Zomato have revolutionized food delivery in a short period. Their penetration is expanding even in smaller cities, making them essential apps for most urban consumers. These platforms enhance the visibility of smaller operators and enable them to compete for consumer attention.”
“Beyond disrupting the food delivery landscape, these apps are transforming the business models of small operators,” Nautiyal said.
“Smaller restaurants are incentivized to adopt new technologies to improve their service offerings, including streamlining digital ordering processes and leveraging social media for enhanced customer engagement. Delivery platforms also empower foodservice operators to scale their delivery capabilities without significant investment, optimizing costs and service efficiency by leveraging the expertise of established platforms,” he said.
Reddy said the popularity of food delivery apps aligns with the findings of a GlobalData consumer survey, where 40 percent of respondents indicated they order through such platforms.
“This percentage rises to 48 percent among the 25-34 age group, who are more digitally inclined and comfortable with online ordering. Delivery platforms are also catering to this demographic by expanding their offerings,” Reddy said.
“While maintaining their own apps, loyalty programs, and delivery solutions, large multinational chains are increasingly leveraging delivery platforms to reach a broader customer base, recognizing them as a convenient one-stop solution,” Nautiyal said. “These chains are also expanding their discounts on delivery platforms to reduce their investment in delivery infrastructure.”
“Given the numerous benefits for both consumers and foodservice operators, the appeal of food delivery platforms is steadily increasing,” Reddy said. “Both large and small operators are capitalizing on their popularity. While challenges such as higher prices and increasing platform fees exist, it remains a win-win situation for all stakeholders.”
