The transaction volume of China’s online food delivery market for 2019 is set to expand at its lowest rate in four years, according a report from mobile intelligence platform Trustdata.
Why it matters: After booming in 2015, China’s food delivery market has experienced rapid growth with the rise of tech giants Meituan and Ele.me. As the market matures, however, growth is gradually slowing.
- The annual expansion rate of around 30% for this year is still healthy but much slower than 55.4% in 2018 and 65.7% in 2017.
- As food delivery continues to grow, calls are increasing for the industry to focus on food safety as well as environmental issues arising from the use of disposable packaging materials.
Details: The sector’s transaction volume is expected to expand 30.8% year on year to hit RMB 603.5 billion ($86.2 billion) in 2019, according to the report.
- The sector’s transaction volume reached RMB 120 billion in Q1, RMB 143 billion in Q2, and RMB 179 billion in Q3 this year.
- The penetration rate of online food delivery services is forecast to reach 14.2% in 2019, up from 10.8% in 2018, according to the report citing research from mobile data intelligence service Trustdata.
- China’s online food delivery users are overwhelmingly young with nearly two-thirds coming from the post-80s and post-90s generations.
- Food still accounts for most online deliveries, followed by desserts and drinks, a segment which rose 88% year on year in Q3.
- Male users tend to order more meals, while female users order across different categories, the report said.
Context: After years of cash-burning to gain market share, China’s online food delivery market has two clear winners.
- Meituan dominates with 65.1% share of the market, and Ele.me has 32.8% share while the others combined account for 2.1%, according to report from research institute Analysys.
Correction: an earlier version of this story cited Meituan as the author of the report, not Trustdata.