Food delivery app development 2.0: China’s food delivery service giant Meituan Dianping’s sales beat all the estimates and helped the company hit $100B valuation amid crisis and looming recession; Amazon launches food delivery app in India: Know why Asia is the emerging food delivery market & On-demand food delivery app development is going to be the next big hit in startups
The Hong Kong-based food delivery giant, Meituan Dianping’s shares hit a record high yesterday, brought its valuation to over $100B, and became the world’s largest food delivery business. It is the third Chinese company to reach this landmark valuation after Tencent in 2013 and Alibaba in 2014.
Meituan’s shares hiked after it reported a smaller than expected 13% of the slide in revenue and better-than-expected sales of $2.4 billion in the three critical months during the pandemic that ended March and drove hopes that Meituan has started to recover from the pandemic effect.
Meituan Dianping is backed by Tencent Holdings Ltd. and offers in-store dining booking and hotel booking services apart from food delivery. Its rivals, SF express, and Ant Financial, both backed by Alibaba Group Holding Ltd., are now elbowing their way into Meituan’s core food delivery business, the best example of it is Alibaba’s food-delivery arm Ele.me which is battling with Meituan for market leadership.
Just a few days before that, Amazon has launched its online food delivery, called Amazon Food, in India. The e-commerce giant has made an investment of more than $6.5B through Amazon Food in selected parts in the city of Bengaluru, India.
Amazon Food has been launched in very critical timings where the established players of food delivery business in India, Zomato, and Swiggy had laid thousands of its employees off in just a month, and global giant UberEats left the country months ago.
But the Amazon has seen the potential of the growing Asian food delivery market in the coming years. The company entered in the food delivery business through the largest Asian market, India. Let’s see what is about the Asian market that attracted Amazon to invest in it even in these adverse times.
Why Asia is the emerging food delivery market?
The Asia-Pacific is by far the fastest-growing region globally in terms of the food delivery market with CAGR of 14% in 2020, according to an independent research firm, Euromonitor International.
Within APAC, China is dominating the market with a stunning CAGR of 55%. On the other hand, India managed to gain the 2nd position but remained so distant to that of China. Well the two markets combined total foodservice value is worth more than 28% of the global total. The other APAC markets in Southeast Asia have high growth potential despite their relatively small sizes.
The food delivery market is already highly saturated in the developed markets of Southeast Asia, and so the companies have to look for ways to steal market share. On the other hand, companies can easily manage to gain market share in the less developed markets of Vietnam, Indonesia, or the Philippines also they are forecast to grow rapidly.
Technology-enabled on-demand delivery of groceries, food, or meal-kit has increased dramatically in the APAC region. Rapid urbanization and comparatively low labor costs across the region are especially well suited to any business. Let dig dipper to understand more about the factors that are driving the market.
Technology is highly integrated into the food delivery industry, accelerating the adoption of existing technologies, as well as a suite of emerging technologies, create immense opportunities for food delivery businesses.
For example, data analytics offer businesses the opportunity to understand customer behavior and preferences in a way that was not possible before.
Food technology is starting to revolutionize the way we produce food, from 3D printing to synthetic meat, and businesses are looking at smart food production. This trend may soon be seen in food delivery businesses.
IoT and blockchain are transforming supply systems and bringing more efficiency and transparency. Through these technologies, it is now possible to track the location and measure the temperature of products in real-time, providing transparency over the entire supply chain.
AR/VR and near real-time video streaming, are creating new experiences for consumers and creating huge opportunities for both food providers and food delivery.
Online food ordering and delivery platforms open the door in particular for home kitchens or delivery-only restaurants and make it possible to start, without the need for significant capital.
Shifting consumer preferences:
The way we choose what, when, how, and why about food is complex and changing, and significantly affects the food delivery businesses. Interest in meat-free consumption is growing in the region, which is sparking the demand for protein substitutions, such as synthetic meat or tofu.
Over 50% of the people in the APAC region are eating out-of-home food at least once a week, which gives rise to home delivery of ready to eat meals and meal boxes delivery businesses.
The region is rising as an experience economy, which means visually appealing foods dominate the market, and the restaurants which are able to successfully deliver the restaurant-like dining experience at home will steal the market.
A changing population creating higher opportunities:
It is expected that the Asia Pacific will be home to more than 10 Billion people by 2050, and almost 9/10 of them will be middle-class consumers, and 1/4 people will be over the age of 60. All these data points only towards the growing demand for food delivery in the region in the near future.
Food delivery app development: Next big hit for startups
With the online platforms for food delivery service are making inroads around the world, the food-delivery market of the APAC region is yet to explore its full potential. We’ve already seen much of that growth pattern play out in Europe, from 56% growth in Sweden to 43% growth in Austria. On the other hand, Asia, Latin America, and the Middle East are at the beginning of their growth cycle in the food delivery spectrum.
The opportunity for the startups is so high that it is possible that in the near future, even the traditional-delivery restaurants will migrate to on-demand food delivery service due to its advantages like cost-efficient, easy-to-manage logistics, etc.
The top five global players of the industry have reached a combined valuation of more than €10B, and the market has become more bullish on the sector, giving the newbie significantly higher valuations and higher levels of funding than the listed companies achieved at the same stage.
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