The explosive growth of online food delivery platforms has created a furor. Leading on-demand food delivery apps, such as UberEats, Swiggy, GrubHub, Zomato, and Foodpanda are known to combine the two things that everyone seeks- Food and Comfort.
By turning the entire process of ordering food into a cakewalk, these food delivery mobile apps have become an immense hit among customers of all demographics. From restaurant owners who are developing their dedicated food ordering apps to services like Zomato and Swiggy which act as a collaboration platform between the restaurants and clients, everyone seems to be joining the bandwagon.
The fact that these food delivery apps have become such an immediate Play Store and App Store pleaser has catapulted them into a business idea that is ordained to succeed. So, if you have plans to create your very own food delivery app, now is the time!
Market Size and Stats
Shedding more light on the significance of food delivery mobile apps, here are some statistics that can help you understand the unprecedented scope of technology in food industry.
- The online food delivery has increased 300% faster as compared to the increase in dine-in traffic since 2014. (Source)
- Online food delivery market is anticipated to grow from $20 billion in 2017 to $55 billion in 2022. (Source)
- 34% of the consumers spend at least $50 per order while ordering online. This is in stark contrast to the average $16-30 one spends in a full-service restaurant. (Source)
- By 2020, restaurants that do not offer online food delivery services will lose over 70% of their customers. (Source)
Bottom-line: Online food delivery apps are quickly becoming one of the growing forces in the food industry.
Revenue Forecast for the Online Food Delivery Market Worldwide from 2017 to 2024
Types of Food Delivery Mobile Apps
Now if you want to create your own app for food delivery, you need to understand the basic food delivery start-up models that are dominating the market.
These are primarily second-platform apps that serve as a link between the customers and restaurants. These apps accept food orders from the customers and pass it on to the restaurants. However, they are not liable for delivering the order to the customers, which is entirely the restaurant’s responsibility. Due to the absence of logistics support, such apps are only suitable for big restaurants that can leverage their own delivery systems.
Apps with Logistics Support:
In addition to the previous features, this model offers delivery services as well. It involves third-party delivery personnel who picks up food from the respective restaurants and delivers them to the customer’s doorstep. These types of food delivery apps hold better market potential as they are also suitable for small-scale restaurants that do not have their own delivery services.
To sum up, aggregator apps are no longer considered a viable venture. So, if you wish to plunge into the development of a popular food delivery app, you must focus on this model.
Dedicated Restaurant App:
This type of food delivery app is an extension of your restaurant business. It is suited to established restaurants that already have a delivery system in place. By launching their exclusive food delivery app, these restaurant owners make it easy for their customers to order their favorite dishes. At the same time, they gain the opportunity to reach a wider base of customers. Apps like Dominos and Pizza Hut fall under this category.
Understanding How a Food Delivery Mobile App Works
A food delivery app works in three stages:
- Stage 1: Customers browse the app and order food from the restaurants using the mobile app.
- Stage 2: Restaurants receive the order and send confirmation text. Consequently, they prepare the order and hand it out to the food delivery agent.
- Stage 3: Delivery agent delivers the food to the customer’s doorstep.
This is how a food delivery app with logistic support operates.
Revenue Model of Food Delivery Mobile Apps
There are several ways in which you can monetize your on-demand food delivery app. Some of the most popular ways are listed below:
1. Delivery Charges
A lot of restaurants do not offer delivery services. These restaurants are most likely to pay for the delivery charges in return for your food delivery services. This is a popular monetization strategy that has benefited many businesses.
Zomato launched its food delivery services in 2015. In a brief spell, food deliveries account for 30% Zomato’s overall revenue, making it the second biggest source of income for the organization.
2. Peak Pricing
This is another popular revenue source, wherein the app incriminates a surged price when the demand is too high. The food menu on the app gets limited and a peak price is charged when the customer places an order. UberEats is one food delivery app that largely relies on this form of revenue stream.
Recently, Swiggy is also experimenting with this new model, where an additional delivery charge of INR 20 is added to every order placed on festivals, holidays and rainy days when there is fewer delivery staff available.
In this model, the food delivery app owner charges a specific amount of commission for every order placed through the app. This is a popular source of revenue for many companies as it helps in generating high income.
This type of revenue model is followed by Foodpanda. It charges a pre-decided commission from the restaurants for every order placed through its mobile app or website.
Advertisements are the best and fail-proof method of generating enormous sums of revenue. You can feature a few restaurants in the top section of the app or run a short video for them on the home screen and for all this, you can charge a specific amount of money.
This is the greatest source of income for the popular Zomato. It generates as much as 62% of its revenue via advertisements.
Challenges Associated With Entering the Online Food Delivery Market
Before plunging into the food industry, you must acquaint yourself with the several challenges associated with the development of on-demand food delivery app.
The competition in the food industry is getting fierce with each day. So, anyone who is planning to develop their own food delivery app might have to face a lot of competition in the domain.
To stand apart, you need to offer your customers with something that other players don’t provide. This has to be in relation to the app’s UI/UX and its features.
Besides, you will have to focus on improved ways of attracting the partner restaurants as well as offering lucrative deals and discounts to the customers.
An Interactive UI / UX Panel
This is where the need for a reputed mobile app development agency heightens. A good app will blend design and movement to ensure that UX remains constant and interactive throughout the app. A well-made design in tandem with easy ordering is what you need to draw customers.
Locating the Right Restaurants to Partner With
A good way to start is by focusing on the small-scale restaurants that are looking for a way to promote themselves. It is a good idea to concentrate on the quantity in the beginning rather than the big ones that are famous among millennials. Gradually, as your app gains momentum, you can focus on acquiring big names.
Deciding the MVP Features
Another challenge associated with food delivery application development is deciding the MVP features that should be incorporated into the app. MVPs have a great impact on regulating the cost of development. Creating a Minimum Viable Product will help you test the waters before taking a full-fledged plunge into the domain. However, deciding on the right features to be integrated can be a trial.
Prominent Names in the Field of On-Demand Food Delivery Mobile Apps
Owing to the increasing popularity of metropolitan culture, on-demand food delivery apps have become mainstream. Currently, the food delivery industry is thickly populated by some prominent names that allow the customers to order their favorite food anytime and anywhere. Some of the leading food delivery mobile apps that are leading the chart so far include:
- Domino’s Pizza
Social Login & Signups:
This feature allows the customers to quickly signup for your app using existing social media accounts. A simple, quick and attractive sign-up page is an important tool for bagging customer loyalty.
Book for Others:
This feature allows the app owners to book food for other, simply by inputting their location and making the payment in advance.
This functionality allows the users to create custom packages by placing special requests or mentioning precise instructions.
This feature allows the users to check out their previous orders and even repeat any of the recent orders to save on time.
As the customer books his order, a floating window appears on screen that enhances the customer experience by providing real-time GPS tracking of their order on the mobile app.
This is a simple feature that allows the app users to leave reviews about the food, service, cleanliness, quality, etc. These reviews often prove to be immensely helpful for new users as they can understand the quality and service offered by different restaurants and make a decision accordingly.
This is a crucial feature of all on-demand food delivery apps. The functionality is often used to send useful notifications to customers, delivery agents and the restaurants. For instance, the app can send notifications to customers informing them about happy hours or special discounts offered by a particular restaurant. Push notifications drive greater engagement.
As the name suggests, this feature enables the users to create a special kind of food platter to be served to their guests at home or at a party. The order can be placed in two ways, either by platter or by setting a specific amount of budget per person. Accordingly, hot and delish food is served to the customers.
This feature is for the restaurants that can use it to effectively manage their franchises.
Real time analytics:
Real-time analytics provide the admin with all the operation data that offers insights into the business. The app generates real-time revenue reports, revenue projections and much more, enabling the admin to monitor the performance of the app as well as the business.
Role Based Dashboard:
Having role-based dashboards is a great way to simplify things. This feature is useful to gauge the progress of each business area in depth.
This is a crucial feature of on-demand food delivery apps. By integrating multiple payment options into the app, you can enable the app users to make quick and hassle-free payments from their desired mode of payment.
Real-time GPS Tracking:
This feature keeps the customers informed of their order’s status. For instance, they can check when their order is placed, being processed and on its way. This is a great tool to keep the customers engaged.
In App Navigation:
Food delivery apps should be integrated with a GPS location identifier. This feature enables the users to track their delivery agent in real time. Besides, the tracking screen also records and displays the tentative arrival time of their order.
Heat map Generation:
This functionality helps in determining the busiest time of different restaurants, making the customers aware so they can book their order accordingly. Besides, this feature is also helpful for the delivery agents as they can accumulate near the restaurants that generate maximum orders at a specific time to avoid delays in delivery.
A robust loyalty program encourages the customers to order from an online delivery service. Using this feature, special offers or discount vouchers can be awarded to the loyal customers of the app. The feature not only allows the restaurant owners to show the customers that their loyalty is valued, but also helps to retain more customers in the longer run.
Marketing Tools (Discount, Coupon, Mail, Text, Call):
Marketing remains to be the most essential component for every business. By integration marketing tools into the food delivery app, restaurant owners can send special discounts, exclusive coupons, first-order rebates, etc. to the customers to lure them. Besides, you can keep them informed about special promotions via call, text or email.
Content Management System is a vital part of every mobile app. By integrating a CMS, the restaurants can manage the content that is available on the app. For instance, the restaurant owners can easily update information about their place, including name of the restaurant, contact details, open hours, address, etc. They can make changes to the menu, prices of the food items, delivery charges and even update and add photos.
Once the order is booked, the customers can make free calls to their particular delivery agent to explain the location, etc. from within the mobile app itself.
In-app chats further help the customers and the delivery personnel to be at a common touch point. Additionally, the users can initiate a chat with the restaurant or the admin, in case of any issues regarding food customization, food delivery, etc.
Phone Number Masking:
This feature facilitates seamless communication between the delivery personnel and the customers without giving out the real phone numbers.
Mobile Wallet Integration:
In today’s digitally-advanced era, all food delivery apps must offer different types of mobile wallet options, such as Google Pay, Apple Pay, Paytm, Venmo, etc. to offer augment ease of payment to the customers.
Having a chatbot has become quintessential for almost all websites. The food delivery app must be integrated with an AI-powered chatbot that has the potential to immensely streamline customer interactions.
AI – Voice Search, Behavior Tracking, Visual Search, Recommendation
Integrating small gaming tasks such as daily spinning wheel, etc. in return for points or other rewards can help to keep the customers engaged.
This incredible feature makes bill splitting between many users quick and easy. Different users can use different modes of payment to pay their share of the food bill.
Cost of Developing a Food Delivery Mobile App
The exact cost of developing a food delivery app depends upon a plethora of factors, such as type of app, type and number of features and functionalities integrated, cost of labor, etc.
Roughly, the cost of developing a basic food delivery app is somewhere around $10,000 to $18,000. However, a high-end app with leading functionality may cost you as high as $40,000.
One crucial factor that largely regulates the cost of development is the cost of labor. The labor charges vary with different countries and regions. For instance, US/ UK based developers charge somewhere between $70 to $250 per hour. For Eastern Europe based developers, the rates vary from $50 to $170 per hour. But this hourly rate is highly affordable in India, where you can easily find seasoned mobile app developers working at $20 to $70 per hour. Thus, in terms of labor charges, India is undisputedly the most feasible option.
Moving on, the cost of development also depends upon the type of mobile app development company you choose. A good agency will be able to provide you with a breakdown of the total cost estimate so you can study the viability of the project in depth.
For instance, a basic food delivery app in India based on the Android platform will approximately cost you:
- Technical documentation: $1,000 to $1,500 / 40 hours
- UI/ UX designing: $1,500 to $3,000 / 50-60 hours
- Front-end and back-end development: $8,000 to $15,000 / 400 hours
- MVP testing: $2,000 to $4,500 / 75-80 hours
- Bug fixing: $1,000 to $3,000 / 40 hours
Another thing to be kept in mind is the platform of development. It costs less to develop an iOS app than it does to develop the one based on Android. It is imperative to closely study the market and conduct a thorough research of the domain and industry. This research will help you develop a flourishing app within the best possible means.