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.
Food delivery: Drivers take the risks. Platforms reap the rewards.
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.