Delivery services consolidate glimpse profitability - The 'delivery' consolidates and glimpses profitability: challenges and challenges for Glovo, Uber Eats, Just Eat and other giants of home delivery in 2022.
Will 2022 be the year of the delivery sector? Yes and no. Of course, it won't be the same for everyone.
Despite the gradual return to normal and the consequent reopening of restaurants, forecasts mark an unequivocal trend: the pandemic meant such an acceleration to the food delivery sector that changes in consumption are here to stay.
According to data from The NPD Group, in Spain today we spend about 2,328 million euros in this market. This is 53% more than before the pandemic.
Delivery services consolidate glimpse profitability
The growth of the sector during this 2021 has reached such a point that it is already between 4 and 7 times larger than it was in 2018 in the most consolidated markets, according to a report by the consultancy McKinsey.
Undoubtedly, the big winners have been the aggregators; the delivery platforms that flood the streets around the world with their riders and coloured backpacks in tow. Uber Eats, Just Eat, Deliveroo, Doordash or Delivery Hero, they are the giants of a sector that gradually begins to consolidate.
Now, the vast majority are looking for ways to be profitable after almost a decade of trading by burning money.
Although for years the viability of these business models has been questioned, now everything points to the light at the end of the tunnel and some of these giants have already announced that this 2022 will come out of the red, as is the case of Delivery Hero.
Data from The NPD Group point out that these platforms have doubled their turnover in their food delivery businesses, and today already concentrate 37% of all spending made in delivery.
Forecasts of delivery services consolidate glimpse profitability
"All the forecast scenarios put forward show us channel growth in 2022," says Edurne Uranga, Head of Foodservice at The NPD Group Spain.
"In terms of consumer channel is here to stay, and in terms of players have to find a way to make it profitable for both restaurants (where we will see in the coming months as independent local leave the delivery) as for the platforms themselves", underlines.
From The NPD they point out 3 key factors that will determine the success or survival of the different platforms and will shape the market in this 2022.
The mantra "growth at all costs" has defined the delivery sector since its inception. Start-ups that in a few months, after raising significant amounts of capital in financing rounds, launched themselves to conquer new markets.
Some did well, many not so much.
In recent years there have been all kinds of movements, both expansion and withdrawal, in each of the continents. One example is Glovo's departure from Latin America in 2020, when it sold its operations to Delivery Hero. Another, more recent and closer, the sonata march of Deliveroo of Spain in 2021.
Acquisitions of delivery services consolidate glimpse profitability
Acquisitions have also marked the sector in recent times, with an almost infinite list that comes to underline that the market is being left in the hands of a few multinational giants.
Among the most important operations include the purchase of Grubhub by Just Eat, that of Postmates by Uber, or the ambitious strategy of expansion of Delivery Hero that has been carried out throughout 2021, which was settled with the acquisition of Glovo at the edge of the new year. And not only that, DoorDash, the American giant of the sector, landed in Europe a few months ago when he took the Finnish Wolt for 7,000 million.
According to a report by the consultancy Business for Apps, the market will reach a valuation of almost 200,000 million euros worldwide by 2026. That is, in just 5 years the sector is expected to have a value of almost twice what it is today.
In addition, in 2020 a new generation of start-ups specialized in ultra-fast shipments appeared (able to take the purchase home in less than 15 minutes) that during the last year shot up their international presence, from Getir to Gorillas or GoPuff. They are capturing millions in each round of funding and already have stratospheric valuations of up to 7,500 million dollars in some cases.
These companies promise to be the next great revolution of delivery, which has already left a trail of 10,000 million dollars in funding according to Pitchbook data. Other experts in the sector, on the other hand, believe that this is a new bubble.
Only time will tell.
