US food delivery market to hit $15.5 billion by 2022
With its Caviar online food ordering and delivery business, Square (SQ) is vying for a multibillion-dollar revenue opportunity. In the United States alone, the on-demand food delivery market is expected to nearly double to $15.5 billion by 2022 from $8.5 billion in 2017, according to estimates by Pentallect.
The food delivery market in the United States is currently dominated by DoorDash, GrubHub (GRUB), and Uber with market shares of 27.6%, 26.7%, and 25.2%, respectively, according to rankings by Edison Trends.
WAKE UP WITH BAGELS & STOX, OUR NEW EMAIL THAT ENTERTAINS AND INFORMS YOU BEFORE THE DAY STARTS. SIGN UP HERE!
Square pursuing a $365 billion prize
On the global stage, some of the big names pursuing dollars in the food delivery market include Alibaba (BABA) and Tencent (TCEHY), which have stakes in several food delivery startups across Asia. Alibaba runs a local delivery business called Ele.me, which last year won a contract to deliver coffee for Starbucks (SBUX) customers in China.
Predictions by UBS cited by Business Insider show that the online ordering and food delivery market is expected to expand ten times over the next 12 years to reach $365 billion by 2030 from $35 billion in 2017. Since Square is still in the early stages of its global rollout, the future looks bright for its Caviar business as it continues its international expansion.
The Caviar business falls under Square’s Subscriptions and Services segment, where its revenue soared 144% year-over-year to $194 million in the fourth quarter. According to Square, Caviar contributed to the robust growth in the segment.