Japan’s food delivery market is undergoing a significant shakeout after attracting numerous companies during the COVID-19 pandemic.

The industry has increasingly consolidated around three operators: U.S.-based Uber Eats Japan, Rocket Now, operated by South Korean e-commerce company Coupang, and domestic platform Demae-can.

The withdrawal of several competitors reflects the difficulty of sustaining operations in a market where customer acquisition costs, promotional spending and pricing competition have placed pressure on profitability.

At the height of the pandemic-driven expansion, more than seven companies competed for customers. However, costly discount campaigns and promotional incentives contributed to a series of market exits.

Uber Eats Maintains a Leading Market Position

Uber Eats remains the dominant platform in Japan, supported by its international operating network, brand recognition and established relationships with restaurants and delivery partners.

The company entered the Japanese market in 2016 and surpassed 1 billion cumulative orders in the country as of October.

According to U.S. research firm Sensor Tower, Uber Eats Japan has approximately 6.2 million monthly active users, giving it more than half of the domestic market.

At a news conference in mid-October, Uber Eats Japan head Yulia Brovkina credited customers, restaurant partners and delivery partners for the company’s growth.

Its market position has strengthened as competitors have withdrawn, although the concentration of activity around a small number of platforms has raised questions about competition.

Competitors Withdraw as Profitability Challenges Persist

Several international and domestic operators have struggled to maintain their positions.

Finnish food delivery company Wolt ended its Japanese operations in March, while Menu, operated by a KDDI subsidiary, discontinued its service at the end of September.

Demae-can remains in the market but faces financial pressure. The company recorded its eighth consecutive annual net loss in consolidated financial results for the fiscal year ending in August.

These developments illustrate the challenges facing delivery platforms that rely heavily on discounts and promotional incentives to attract and retain users.

Rocket Now Challenges Established Platforms

Rocket Now has emerged as a significant competitor since entering Japan in January last year.

The platform has expanded by offering deliveries from more than 10,000 restaurants at the same prices charged in-store, without delivery or service fees.

Its cumulative app downloads exceeded 8 million in September, while its monthly active users increased enough to place it second in the industry.

The company’s pricing strategy has forced Uber Eats and Demae-can to adopt similar in-store pricing models, intensifying competition across the market.

Although the approach offers consumers more transparent pricing, it also places additional pressure on operators to sustain their businesses without relying on delivery fees or higher menu prices.

Price Competition Raises Market Concentration Concerns

The growing competition around pricing has prompted concerns about the long-term structure of Japan’s food delivery industry.

An industry expert warned that competition based primarily on price could allow financially stronger companies to dominate the market.

Such an outcome could eventually disadvantage consumers and restaurants if the number of viable delivery platforms continues to decline.

The concern highlights a broader challenge for the sector: maintaining affordable delivery services while ensuring that platforms, restaurants and delivery partners can operate sustainably.

What Investors and the Market Should Watch Next

The next phase of Japan’s food delivery market will depend on whether operators can balance competitive pricing with sustainable economics.

Uber Eats’ established user base gives it a substantial market position, while Rocket Now’s rapid expansion is reshaping pricing expectations. Demae-can’s continued financial losses also highlight the pressure facing domestic competitors.

The evolution of these three businesses will determine whether the market stabilizes around a smaller group of operators or continues moving toward greater concentration.