The online food delivery industry has experienced a considerable surge in recent years, driven by a shift in customer preferences from dining out to ordering food online. This remarkable growth has been further boosted by changing consumer behavior.
According to Statista, the global online food delivery sector was valued at 770 billion U.S. dollars in 2022 and is projected to reach 1.4 trillion U.S. dollars by 2027. This exponential growth has attracted numerous business entrepreneurs and startups who are eager to enter the online food delivery market, aiming to establish their own food delivery apps and tap into a lucrative revenue stream.
However, despite the immense potential and vast opportunities for growth, the food delivery business presents its own unique set of challenges for startups in this sector. Today, we will explore the key challenges faced by entrepreneurs venturing into the online food delivery industry.
10 Biggest Challenges Faced By The Food Delivery Businesses Nowadays
1. Unstable Pricing Model
The food delivery industry is becoming extremely competitive, with several new players joining in. And this, in turn, has made it difficult for competing businesses to identify the right pricing strategy.
The new startups entering this industry prefer to work on low margins to thrive and grab the attention of the users. They even adopt various offensive and defensive pricing models to stay competitive. However, all this puts pressure on the margins and affects their profitability. Additionally, the highly volatile food costs further add up to the challenge.
The best way to address this problem is by thoroughly analyzing the pricing policy adopted by established players in the market. Furthermore, identifying the latest trends in the online food delivery industry and the price sensitivity of customers can help to develop a profitable pricing strategy.
2. Unpredictable Food Quality
Maintaining the same level of food quality and freshness every time it is delivered to a customer is a challenge for many restaurant partners. Food undergoes a lot of stress during transit due to bumps, movements, and vibrations on the road. All this may sometimes adversely impact the food’s freshness levels.
For entrepreneurs, it is advisable to thoroughly check the restaurant partner’s packaging and safety guidelines before enlisting them on their food delivery platform. Also, restaurants should use high-quality packaging products, such as insulated food bags, to keep the freshness of the food intact.
3. Managing Logistics
This is one of the greatest challenges faced by many food delivery startups. Often, the huge influx of orders makes it difficult for the delivery partner to provide on-time deliveries. This usually happens in the beginning, when the restaurants do not have the capacity to manage big logistic orders without disrupting the walk-in orders.
Additionally, problems like prioritizing order requests, allocating the right number of vehicles, and selecting specific areas for food delivery also hamper several startups.
The best way to resolve this challenge is by integrating your food delivery platform with features like order scheduler, delivery router, location tracking, geofencing, etc. Besides, providing the right training to the delivery personnel can also help to ensure timely deliveries.
Also Read: How To Develop A Food Recipe App
4. Building A Stable Customer Base
In today’s age of eCommerce, the number of food delivery platforms is constantly rising. Thus, the customers are overwhelmed by the choices available to them. In such cases, engaging new users and making them stick to your platform is not easy. A restaurant or delivery service that offers better deals, incentives, and perks earns the loyalty of the moment. But there is no sure-fire way to engage and retain customers.
The best way to address this challenge is by running a referral program and providing new customers with ongoing discounts and offers. Also, you can focus on developing a smart application with an intuitive and easily navigable UI. Features such as food tracking, advanced search, gamification, etc., can also help to improve the user experience and make them stick around.
5. Partnering With The Right Experts In The Market
For entrepreneurs developing an aggregate food delivery platform, identifying and partnering with the right restaurant partners requires loads of effort. Joining forces with the best and quality partners and listing them on the platform helps to establish a good brand image. However, with a plethora of food outlets out there, filtering the best ones may become a challenge.
Furthermore, making the onboarding process smooth for each restaurant partner may also involve a lot of time. To face this challenge, it is best to work with an onboarding expert who can provide actionable strategies and strong support to the partner restaurants to make the process easier.
6. The Threat Of Bigger Players
In the food delivery industry, the ultimate goal of every startup is to win customer loyalty and earn a big market share. However, players who are operating in this industry for a long time now have set up huge customer bases, leaving little room for new players. And this has led to market capitalization.
This is one of the greatest challenges for new and upcoming players. That said, the best way to beat the competition is to maintain superior customer friendliness, high responsiveness, and great support. Entrepreneurs need to entice new customers with an online platform that they wish to use again and again.
7. Identifying The Most Suitable Marketing Strategy
Even if you have developed a full-fledged food delivery software integrated with the best features, finding new users can get challenging. This is especially because you are not channelizing the most suitable marketing platforms. Many times, the rapidly shifting customer preferences may make it hard to define a proper marketing strategy.
The best way forward is to create a robust advertising plan that lists all your marketing strategies in advance. This includes thorough details of your target audience along with the best platform to find them. Also, it is a great idea to collaborate with food bloggers and influencers to improve brand visibility and build a solid online presence.
8. To Cope With Customer Expectations
In this internet-enabled world, customers have become highly cognizant. They have huge expectations when it comes to online services, especially food delivery. And to cope up with these expectations, you must provide them with high-quality food service.
The customers are looking for convenience and simplicity. They want the process of food searching and ordering to be straightforward. Also, they expect timely food deliveries at their fingertips. So, as an entrepreneur, you must ensure a strong food delivery system that meets the needs of your customers.
9. Maintaining Timely Deliveries
Ensuring prompt and timely delivery of orders can pose logistical challenges for businesses, particularly during peak hours or in areas with heavy traffic. To overcome this, companies may employ various strategies such as optimizing delivery routes, leveraging real-time traffic data, or partnering with third-party logistics providers. By effectively managing their delivery processes, businesses can minimize delays, improve customer satisfaction, and maintain a competitive edge. Utilizing technology, such as route planning software or tracking systems, can enhance visibility and enable businesses to proactively address any potential bottlenecks that may arise during the delivery process.
10. Managing Order Accuracy
Accurately taking and fulfilling customer orders is vital for businesses to maintain high levels of customer satisfaction. Mistakes like providing incorrect items or missing ingredients can lead to dissatisfaction and potentially harm the company’s reputation. To manage order accuracy effectively, businesses can implement robust order management systems that ensure accurate order entry and fulfillment. By prioritizing order accuracy, businesses can uphold customer trust, foster loyalty, and create positive brand experiences.
How Emizentech Can Assist You?
When it comes to choosing a reliable and competent partner for app development, Emizentech stands out as one of the best companies in the industry. With their extensive experience and expertise, they offer unique solutions to overcome the challenges faced by food delivery app businesses. Here are some compelling reasons to choose Emizentech:
|Proven Track Record||Emizentech has an impressive track record of successfully delivering high-quality food delivery apps for various clients across the globe.|
|Customized Solutions||We stay at the forefront of technological advancements in the food delivery app development industry.|
|Cutting-edge Technology||We prioritize user experience and interface design.|
|User-centric Design||We prioritizes user experience and interface design.|
|Ongoing Support||Understanding that every food delivery app business is different, We excel at providing custom solutions.|
Choosing Emizentech as your food delivery app development partner can give your business a competitive edge, providing you with a robust and efficient platform to serve your customers and overcome the challenges faced by the industry.
The future of the online food delivery industry is seemingly very bright and full of potential. But at the same time, the food delivery startups must ensure to battle these aforementioned hindrances to thrive and flourish in the competitive market. With the following pointers in mind, it will get easier to develop a smart food delivery solution and serve your customers better.
If you are facing any issues in building a food delivery app then get in touch with us for expert assistance. Emizentech has many clients in the food industry, and our app development team is quite adept with it.