DoorDash, Uber Eats, and Instacart challenge major ecommerce retailers
Third-party on-demand food delivery providers including DoorDash, Instacart and Uber Eats are expected to overtake some of the largest U.S. retailers in e-commerce sales by 2025, according to plans from Edge’s Retail Insight research arm. by Ascential.
U.S. Gross Value of Goods (GMV) sales will more than double to $ 27.33 billion at Instacart and $ 27.58 billion at Uber Eats by 2025, overtaking Target.com, of which GMV sales are expected to reach $ 24.44 billion in 2025 from $ 14.87 billion in 2020, Edge Retail Insight said on Friday when releasing the results of its “Sizing the Delivery Intermediary Opportunity” study. Boston-based market researcher CPG cited Instacart’s expansion both inside and outside the grocery arena and Uber Eats foray into restaurant delivery to retail grocery as catalysts for expansion.
Meanwhile, Edge by Ascential and Edge Retail Insight analysts predict DoorDash – the nation’s largest app-based restaurant delivery service – will overtake eBay.com by 2025 to become the third largest e-commerce banner in the United States, behind Amazon.com and Walmart. com.
DoorDash’s expansion into the grocery store last summer and partnerships with other category retailers are expected to bring GMV sales to $ 48.57 billion by 2025, more than doubling its sales by 22. $ 34 billion in 2020, according to the report. And during this period, Retail Insight analysts forecast moderate business-to-consumer (B2C) growth – excluding consumer-to-consumer sales – from Ebay.com, with GMV sales expected to reach $ 34.6 billion. in 2025 compared to $ 30.55 billion in 2020.
The Edge Retail Insight study predicts that 2020-2025 GMV e-commerce sales will grow from $ 277.94 billion to $ 498.4 billion at Amazon (including online and offline sales) and from 29 , $ 65 billion to $ 61.9 billion at Walmart (including online and offline sales and Sam’s Club sales, and excluding fuel).
A method of evaluating the size of a third-party (3P) market, GMV is calculated by multiplying the number of products sold by the price at which each product was sold in a given period, said Edge by Ascential and Edge Retail. Insight.
“Electronic commerce is growing and changing rapidly. Consumer behaviors and buying habits have been forever changed by COVID-19, and we are now living in the future of retail, ”said Deren Baker, CEO of Edge by Ascential, in a statement. “The delivery intermediary market is an exciting and rapidly changing space, defined by large mergers and acquisitions, market announcements and emerging rivals with new business models that are catching the attention of high-income venture capitalists. cash.
“One thing is certain: Consumer packaged goods (CPG) companies cannot ignore these companies in their quest to succeed in the new world of retail,” added Baker.
The Edge Retail Insight report estimates that U.S. GMV sales at on-demand food delivery providers will grow from $ 63.83 billion in 2020 ($ 44.75 billion for restaurants, $ 19.09 billion for groceries). ) to $ 138.77 billion in 2025 ($ 98.86 billion for restaurants, $ 41.91 billion for groceries), for a compound annual growth rate (CAGR) of 16.8%.
This rate is nearly 1.7 times faster than the total e-commerce market in the United States, which is expected to grow at a CAGR of 10.1% during this period, from $ 516.83 billion in 2020. to nearly $ 1.1 trillion by 2025. At the same time, the share of overall online business sales by delivery intermediaries – last mile delivery platforms that partner with restaurants, supermarkets and non-food retailers – will more than double from 5.4% in 2020 to 11.2% in 2025.
In grocery retail, the on-demand delivery market is expected to grow nearly 150% to reach $ 76.27 billion in GMV sales by 2025, even after the end of COVID-19 restrictions and reopening economies, said Edge Retail Insight. DoorDash is expected to account for around a third of the grocery delivery platform’s sales in the United States by 2025, with Uber and Instacart each following each with a share of around 20%.
“As more and more retailers cooperate with these middlemen as a cost-effective way to quickly increase fulfillment capacity, we see them becoming critical points of influence in a buyer’s purchasing decision,” observed Xian Wang, vice president of Edge Retail Insight. “Brands need to start treating intermediaries like customers to gain visibility on these platforms. On-demand delivery will be a key sub-channel in retail going forward, and CPG brands will need to determine who to partner with and develop tailored product, pricing and promotion strategies to drive conversion. on these platforms.
Edge Retail Insight added that its study primarily focused on leading app-based on-demand food delivery platforms that started delivering meals for restaurants and quickly spread to other categories, such as as groceries and health and beauty care. The scan does not include a new generation of apps that “have burst onto the grocery delivery scene in recent months, threatening to complicate supply chains even further with their grocery promises to. your door in 10 minutes, ”said the researcher.
“The challenge for CPG brands is that this industry is so dynamic and has such a short history, and therefore data to quantify the delivery opportunity is hard to come by,” Wang added. “Our latest collection of research on this topic is designed to give manufacturers the confidence to make the right choices and investment decisions when it comes to delivery intermediaries.”