Will the Food Delivery Industry Be Monopolized?

Nowadays, new technology is growing fast. Shopping and ordering food via the Internet becomes popular in daily life. Especially during the Covid-19 pandemic, the food delivery market was growing bigger and bigger. This paper aims to study the possibility of the food delivery industry becoming monopolized. We analyze the issue from three perspectives. First, market segmentation can have an impact on industry competition. It is difficult to monopolize the food delivery industry because of geographical distance and different consumer preferences among different areas. Second, the food delivery company is a typical two-sided platform. The platform establishes balanced competition. The platform participants are not individuals in the food delivery industry. If the pricing structure changes, it will influence consumers’ demand. Since the competitive pressure in the industry, it is difficult to maintain costumer. We also look at the issue from the angle of game theory. In a Money Burn game, whether the incumbent company becomes a monopoly depends on different situations. In the food delivery industry, each delivery company is a participant, and each participant's gains or losses largely depend on the responses of other participants. The Money Burn strategy would reduce the possibility of new entrances, therefore reinforcing the incumbent company's market power.