It’s hard to find time to visit your favorite restaurants, especially when there’s a global pandemic going on. In such situations, technology saves people’s desire for food by enabling online food delivery through food delivery apps. On-demand food delivery apps have been making our lives hassle-free and convenient for quite some time now. These apps allow users to order food from their homes through the app and have it delivered to their doorstep very quickly. These apps offer customers a wide variety of restaurants, allowing them to order food while providing additional information about the restaurants. Because of this, mobile food delivery apps have changed the game for the food and beverage sector. If you are looking for a partner to develop your food delivery app, then here are tips and recommendations that you should be aware of, including food delivery app development costs before developing a food app.
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Reasons to develop a food delivery app
Food delivery mobile apps have undoubtedly made our lives easier and simpler. According to research by Jackpot, there are basically 3 main reasons why this phenomenon can bring fortunes to the food and beverage industry.
- Food apps are more practical
- Some people don’t have time to go to a restaurant
- Some don’t know how to cook
- About 61% of users think they would like to order food from a restaurant.
- By 2022, the online delivery industry will grow to $55 billion.
- Many small and large restaurants have increased their sales by 25% thanks to online food delivery services.
- In 2019, payments made online amounted to around $210 billion.
How to generate income with online food delivery?
There are various ways in which you can generally manage and generate profits in an online food delivery business.
Taking commissions from restaurants is one way you can generate profit for your online food delivery business. You can claim a commission for every order your partner restaurant receives from users.
There are some restaurants that do not deliver food to your home. With an on-demand food delivery app, you can deliver food to the user’s doorstep. You can set delivery charges based on distance.
Big players like UberEats raise prices whenever demand is high. It limits the offer options and is charged extra at the time of placing the order. This increases the amount for delivery per order.
One of the best ways to generate high income is through advertising. By asking certain restaurants to be at the top of the list or offering to place premium videos of certain restaurants on your service to generate additional revenue. Alternatively, you can also use Google AdSense on the platform to earn advertising revenue.
Challenges in offering online food delivery services
Although online food delivery is always trending, there are some problems. So, before entering the online food delivery market, you need to know about all the challenges that you may face.
Competition in the food delivery industry is increasing as many e-commerce giants and individual restaurants enter the business. Names like Uber and Amazon are already in this competition with services like UberEats and Amazon Restaurant.
One of the most important success factors in any online platform is maintaining customer loyalty. Customers are always attracted by discounts and offers. Your online food delivery business will easily gain customer loyalty with this phenomenon. It is clear that companies that do not focus on maintaining customer loyalty have faced bitter consequences, often resulting in the loss of large market share.
Searching for partner restaurants
If you don’t focus on these factors, it can become a hindrance to your business. You should work with restaurants of different scales. Instead of always going with bigger brands, you also need to connect with a small start-up restaurant that is new to the market and looking for promotion.
Selection of MVP features
One of the most difficult tasks in app development is deciding which features to include and which to exclude from an on-demand food delivery mobile app – the Minimum Viable Product (MVP). It is always recommended to test an app idea before launching a fully functional version. By creating an MVP, you can easily test your idea without spending a huge amount of money.
Since the screens and user flow of all applications i.e. user, admin, delivery manager and restaurant are different from each other, it is difficult to maintain a uniform user interface/user interface for each application.
Two categories of food delivery apps
There are two types of food app platforms in the market, “aggregators” and “new deliveries”.
Models of aggregators that were introduced to the market about 30 years ago follow traditional methods of food delivery. By logging into the website or app, buyers can quickly explore offers, prices and user feedback. Aggregators make money through many pricing models such as delivery fees, markups, and restaurant promotions.
With their asset-mild version, aggregators post earnings before interest, taxes, depreciation and amortization (EBITDA) of 40-50%. While investment continues to pour in (delivery hero and Foodpanda, for example, both attracted €100 million in new funding in 2015), most of the consolidation in this sub-category has already ended.
4 players – Transport Hero, Foodpanda, GrubHub and Just Eat – have done global scale. At the national level, there are usually two or three competitors that dominate, driven by their ability to build the supporting infrastructure.
The brand’s own mobile app
A medium-sized restaurant can build its own delivery app. Unlike restaurant aggregators, these apps are personalized for their own restaurant and will provide customers with a hassle-free shopping experience. People tend to buy more things when shopping online, which can make all the difference to your business. The report states that online food delivery orders placed through mobile apps are $4 higher compared to orders placed in a restaurant.
However, developing your own restaurant delivery app requires a lot of investment and time. If you are wondering how much it costs to develop a restaurant app, read the next blog post.
Why do you need to invest in food delivery app development?
Nowadays, people are very busy with their schedules and don’t have time to have dinner in a restaurant. Even if we look at the market, the online food delivery industry is growing at a fast pace with a number of apps that deliver food to the customer’s doorstep.
Millennials also love exploring different foods and restaurants. They also enjoy fast food delivery and mobile food delivery apps do the same. Thus, by investing in online food delivery mobile apps, you can easily generate a huge amount of profit for your business. For more information, check out the statistics below to understand the current state of the online food delivery market.
- In 2019, the revenue of the food industry reached USD 107,438 million.
- With each passing year, the food delivery industry is growing by 9.9%. With this growth, the food delivery market is expected to be approximately USD 156,819 million by 2023.
- Currently, the restaurant-to-customer delivery sector is at $53,652 million, but it will be $74,643 million by 2023.
How is an online food delivery app bringing wealth to restaurants?
On-demand food delivery apps like UberEats and FoodPanda have significantly boosted restaurant sales. These apps provide convenience to the customers and due to this, they are used worldwide. Following this trend, many start-ups are also planning to launch their own food delivery app. Here are some benefits that support why you should develop a food app for your business.
Food delivery apps are easy to use and offer users the convenience of ordering food. As a result, more and more customers are using food delivery apps to get food delivered to their doorstep. An interactive UI/UX with smooth search options and categorized restaurants and menus make it easy for users to buy food.
Food delivery apps offer 24/7 customer support to address all customer queries and complaints. Customer support is one of the most important features of any on-demand app and it makes the app more trustworthy as users can get answers to all their complaints and queries within minutes.
Food delivery apps are integrated with various payment gateways like credit/debit cards and e-wallets like Google Pay or PayPal. Cashless transaction encourages customers to use food delivery apps.
Food delivery apps Deliveroo and Just Eat offer loyalty rewards and points to potential customers. This attracts and encourages more users to use the food delivery app for ordering food. Customers can use these loyalty points or credits towards future orders.
Food delivery is not a new concept. It has been around for over half a decade. However, a very small part of the globe has access to online food delivery services, and this is where the opportunity for the growing online food delivery market comes to life. This is further supported by the fact that more and more people are embracing smartphones and internet culture.
If you are looking for a top app development company, we will be high on your shortlist. We have been working in the on-demand application segment for years, which has brought us great knowledge and experience in this sector. Here is a link to our recently developed on-demand food and beverage mobile app