With the new online platforms making inroads around the world, the food-delivery market is in the midst of a dramatic channel migration. We expect online delivery to grow by 25.0 percent per year from 2015 to 2018 in key markets, after which it will taper off to 14.9 percent per year until 2020.
New data indicates that online’s penetration of the total food-delivery market broke 30 percent in 2016. We believe penetration rates will grow further as the market matures, eventually reaching 65 percent per year. This is the pattern we’ve seen, for example, in the more mature flight-booking category, which has seen a dramatic channel migration over the past 10 to 15 years, as well as for selected food-delivery players, It is quite likely that the food category will follow these patterns.
We’ve already seen much of that growth pattern play out in Europe, where online penetration rates run from 56 percent in Sweden to 43 percent in Austria. At the other end of the spectrum, Asia, Latin America, and the Middle East are at the beginning of the growth cycle. The key catalysts for the adoption of online food delivery are the overall level of funding for the industry and the size of marketing budgets. Technology penetration—mainly smartphone and online penetration—has only been slightly relevant to the speed of adoption so far due to the geographic expansion of food players. We believe that the food category will grow in line with the smartphone category as new smartphone users adapt their behavior to take full advantage of the technology.