1. The five forces
- Rivalry among competitors (high): a few large platforms compete on discounts, delivery fees and restaurant choice, and customers notice every price change.
- Bargaining power of buyers (high): customers can switch apps in seconds and many keep two or three installed.
- Bargaining power of suppliers (moderate): popular restaurants can demand lower commissions or sell through their own apps, but most small restaurants rely on the platforms to reach customers.
- Threat of new entrants (moderate to low): building an app is cheap, but winning enough restaurants, riders and customers at the same time is very expensive.
- Threat of substitutes (high): picking up food, cooking at home, meal kits and restaurants' own delivery all meet the same need.
2. Verdict
With strong rivalry, powerful buyers and many substitutes, the industry is structurally unattractive, which helps explain why platforms struggle to make steady profits. A platform investing further should look for ways to weaken these forces, for example a subscription that reduces switching, or exclusive restaurant partnerships.