ONLINE TAKEOUT SET TO TAKE OFF
EXTRAORDINARY OPPORTUNITIES IN US DELIVERY AS OFF-PREMISE CONSUMER SPEND INCREASES
IN THE ON-DEMAND ERA OF INTERNET STARTUPS, ONLINE FOOD DELIVERY TECHNOLOGY BUSINESSES ARE FAST EMERGING AS AN ONLINE-TO-OFFLINE (O2O) SERVICE THAT SERVES AS A GO-BETWEEN CONNECTING RESTAURANTS AND CUSTOMERS.
The National Restaurant Association estimates that commercial eating places, comprising restaurant chains and some 400,000 independent restaurants, will collectively earn $536 billion in projected 2016 revenue – one of the largest US retail industries. Of that amount, we estimate that Americans will spend 40%, or in excess of $200 billion, on takeout food headed into 2017. Roughly 60% of this market, therefore, remains open to be pursued for delivery business expansion.
Of this $200 billion constituting off-premise, addressable consumer spend, we estimate that roughly 5%, or only $10 billion, of takeout transactions in the United States are currently handled through online and mobile ordering. (This is not confined to the largest US cities, which typically have higher penetration.) The remaining share comprises offline phone ordering. This amounts to about half the penetration of e-commerce at about 10% of sales transacted online (when factoring out sales of automobiles and fuel) and one-eighth of online travel at 40%.