Qatar's online food delivery market projected to grow; valued at $185mn in 2020: ValuStrat

Online food delivery market in Qatar has been projected to grow 14.4% this year, driven by Covid-19 restrictions, researcher ValuStrat said and noted the food-delivery market in Qatar was valued at $185mn in 2020.
The recent pandemic-led boom in online food deliveries in Qatar has increased competition amongst market players, ValuStrat noted. As a result, the “market was positively reinforced with shorter turnaround times, better customer care and complete substitution” of dine-in with online deliveries.
Food and beverage suppliers across the GCC region have seen significant growth in their online businesses and delivery portals because of Covid-19 related social distancing and stay-at-home restrictions.
“As consumers gained comfort with shopping over the Internet, online food ordering followed as an organic next step. Customers who grew accustomed to e-shopping expected the same convenience when it came to ordering meals. Subsequently the online food delivery segment has also grown,” ValuStrat said in its report titled ‘Positive impact of Covid-19’.
While the industry flourished during the pandemic, there were also reports of disagreements between platforms and restaurants regarding the commission structure. So now some platforms have adjusted to a more viable business model with a fixed-fee structure, ValuStrat noted.
In terms of future trends, ValuStrat said, “As consumers gained confidence in shopping over the Internet, online food ordering has followed as an organic next step.”
Online ordering offers convenience and time-saving benefits, which are especially favoured by Generation-Z because of their hectic and on the go lifestyle, leading to the growing popularity of the online food ordering and delivery market in the GCC.
On the supply side of the online food ordering industry, cloud kitchen is a fast-evolving segment, ValuStrat noted. However, there are concerns about oversupply in developed markets because of the entrance of several players in recent times.
Given the entry of many new firms, going forward the the market could see some consolidation through mergers and acquisitions.
“We also predict further disruption in the business model of online delivery as the current framework banks on sky-high commissions, which is not sustainable. Blockchain technologies have the potential to re-disrupt the market offering with reduced ‘cost to serve’ for F&B outlets,” ValuStrat said.
Despite lockdowns, social distancing and a healthcare crisis, some sectors have managed to flourish during the pandemic, ValuStrat said. “Whilst there is consensus that these industries have benefited from the pandemic, it remains to be seen if these industries will continue to flourish just as much in the post-pandemic world,” ValuStrat noted.