Published In : Cost Estimation September 6, 2019
Food Delivery App Development: Will it make a hole in your pocket? Let’s find out.
Getting food and groceries delivered at your doorsteps is now easier than ever. Thanks to on-demand apps!
According to the Harvard Business Report, the on-demand economy is attracting more than 22.4M consumers annually and $57.6B in spending.
Yes, that’s true! And these mobile apps are not loved for any random reason, they deserve this limelight. Apps like Postmates, GrubHub, JustEat, Seamless, DoorDash, and others have disrupted the food and restaurant industry with their mobile apps and in a good way.
Here are a few stats to prove the same:
On-demand food delivery platforms offer users everything that they desire – may it be comfort of getting food at their doorsteps or variety of cuisines that they are craving for.
Whether one is too lazy to go out or too occupied to even think about cooking, they can always opt for ordering food online using apps like Postmates.
But, how much it will cost you if you plan to make apps like Postmates or UberEats? Before answering the same let’s first look into a few reasons why you should invest in this industry:
The world is brimming with failed start-ups. But, why are these businesses failing? The answer is because of wrong selection of market. New-startups all over the world are making one of the following mistakes:
Enter an overcrowded market
Choose an outdated market
Select a market that is a non-existing for users
While when it comes to food delivery market none of the options apply to it. It’s not outdated, it’s not overcrowded and is definitely well-known to the users. Here is something to make it easy for you to believe the same:
You know what those stats mean? They mean that the market is developing and now is the ideal time for you to make a food delivery application and join the stream!
Also Read: Our CEO’s Take on “Why Mobile Apps Fail?”
As per Statista, the revenue of Online Food Delivery Segment amounted to US$107,438m in 2019 from US$91,406m in 2018. The key reason for this steep increase in revenue is the amount and number of funding these businesses are getting.
That means you have enough scope of getting fundings and increasing your revenues if you enter in this space and satisfy the cravings of your customers using the latest technologies.
A wide customer base is another reason behind why your food-delivery business will succeed. Let’s have a look at who are the potential users of a food delivery app. The answer is anyone who owns a mobile phone!
School or college students who usually hang out and like to order food online. Employees of offices who simply don’t have time to go out and eat food outside. Families who like to try new cuisines like Mexican, Chinese or Thai at their home.
Such a huge customer base makes possible a stable stream of orders, pleasant revenues and a successful business.
Now that we have looked into what the Food-delivery Market has in-store for you – Let’s dig into the concept of On-Demand Food-Delivery Apps and analyze the competition.
While there are a number of food-delivery apps running around the world – the ones shown above are the leaders. The valuation of all these brands are touching skies and they are popular in not just one but many countries all around the globe.
Want to join the list of these players? Well, you need to do a bit of research to reach at that level on the following things before you start the development of your own app:
A number of entrepreneurs start their business in their home country. However, the reality is every country isn’t able to produce a decent amount of revenue.
Thus, the solution is:
Select a market where there are high potentials of revenue generation and serve it with all that you have.
According to Statista, with a market volume of US$40,239M in 2019, most income in Online Food Delivery Market is produced by China and this makes it probably the best market to begin a food-delivery business for revenues and income.
After China, USA, India, UK and Japan hold the potential to embrace a food-delivery startup. Let’s have a look at the entire list of the most revenue generating countries around the globe in food-delivery space:
When you start a business, your success and failure relies upon how strong your business model is. What are your value prepositions and what is your customer segment? And how you generate revenue from your business? A viable business model provides an answer to all these questions.
To understand how apps like postmates work, read our comprehensive blog on Postmates Business Model
Below mentioned are three types of business models an on-demand food delivery business relies on:
Order Only model
Using this Business Model, food delivery platforms connect customers with nearby restaurants and encourage interactions between them. These applications aggregate offerings of independent restaurants that handle deliveries themselves, helping businesses extend their market reach. Order only platforms generate revenues by charging a few percent commissions from the restaurants.
Order and Delivery Model
Using this business model, on demand food delivery apps also handle logistics for restaurants, cafés and food joints. An association with this these platforms is valuable for any restaurant as they don’t need to search for and pay couriers or look after vehicles.
These types of services take 20 to 30 percent on the cost of each order and may charge a delivery fee to customers. Apps like Postmates and Zomato work on this business model.
Fully integrated model
Fully independent platform deal with all the things by their own: they prepare meals and deliver to customers themselves. These platforms can serve individual as well as corporate clients.
If you are planning to start an online food delivery business, you must choose your business model carefully. Go for fully integrated model only if you have the capability to do it all by yourself as it will require more resources and high operational cost.
So, if you are just going to enter in this industry, it will be wise to begin with the simplest business model and that is Order Only. And, after that you can proceed onward once you have a strong base of partnering restaurants.
As mentioned above, there are as of now numerous players in the online food delivery market. To succeed here, you should know what is your USP in this enormous market and your application should be developed to feature it. You should have at least 1 – 2 things that you are doing differently from your competitors so that the customers are attracted to your app only.
Now that we know much about the on-demand food delivery market, it is time to take a look at the features that must be there in your on-demand delivery app.
A food-delivery mobile app consists of three different panels – Customers App, Driver App and Restaurant Panel. We have created a list of the most important features that are required in your app to make it a big hit.
You can surely include more features in it, however you should not compromise on the ones mentioned features:
Search: The user should have the option to search and compare different restaurants, discount offers, and cuisines in a food delivery application. They should have the option to browse in-app by price, cuisines, location, rating and reviews and restaurant names – as per their needs.
Request: Ordering food or grocery from an on-demand app must be very easy. This feature should empower users to add or remove products from the cart. They should also have the option to cancel or reorder as and when they wish.
Favourites: The user should have an option in app to make a list of his/her favorite items or products. So that they don’t need to search for them again and again. This makes reordering or requesting something previously out of stock very easy.
Real-time tracking: When users make an order, they are keen to get it ASAP. Using GPS or tracking system incorporated into the application, users should have the option to track their orders, from preparation to delivery.
Coupons: All top food delivery applications have this feature to attract new customers and to retain the old ones. Everybody prefers to save money and that’s why this feature is an unquestionable requirement in your food delivery application.
In-app chat: Users may have a few specifications or inquiries about their orders that they may want to discuss with the delivery guy. This is the reason it is important to have contact details of the driver and in-app chat option in an application for delivery of food and goods.
Payment: While making an online food delivery app like Postmates, making payments simple, quick and secure is extremely crucial. You can integrate payment portals like e-wallets, cards, net banking or COD as an alternative to pay bills.
Also Read: Future Of On-Demand Apps Today And Beyond
Registration: App-onboarding should be as easy as possible for drivers. Signing up using a simple username and password and verifying with Google, Apple or any social media account is acceptable.
Manage deliveries: The delivery guys should get orders on time. They should then have the ability to accept or reject orders. Using this feature, they can keep track of all their deliveries and also would be able to deliver on-time.
Order Status: The delivery personnel should get updates instantly if there is any change in the order specifications – may it be related to order location, addition or removal of any item or any other change.
Additionally, the driver should be able to update the user as well as admin about pick-up and delivery of every single order.
In-app chat: This feature is an absolute necessity as the driver could have questions with respect to the user’s location or the way to approach the user. A driver application must have chat functionality embedded in-app so that he could contact the user directly without wasting time.
Dashboard: The dashboard help restaurant owners to keep an eye on all their orders – completed, pending or the ones that are going to deliver soon in an easy manner. Using their dashboard, restaurant owners can keep an eye on everything that is processing in their restaurant.
Manage Restaurant Account: The restaurant owners have to manage the menu, contact, address and a lot of other things in the app. They also have to make updates in pictures of their ambiance, cuisines and special offers. So, a restaurant panel of a food-delivery app should provide the owners with the ability to make all of these edits and updates.
Accept or Reject Orders: It is the most important feature of a food-delivery app, users have the ability to cancel the order anytime, for example, if the order is taking too long, a user can cancel it, and it will be counted as a loss for the restaurant, the owners should also have the ability to cancel any request with this feature
Payment: The restaurant panel should have the feature to transfer money from their app to bank accounts. The process should be simple and integration of various platforms like eWallets or Paypal is must.
The app owners can give the best services only if their app is prompt with amazing features and the company provides on-time service. Below mentioned are a few advanced features that you should consider while your Food Delivery App Development to provide amazing value to your users:
Gamification is a feature which is gaining popularity in the industry through numerous food ordering applications. It basically uses the game mechanics in the Online Food Ordering Applications to award its users on task completion.
Using it, you can create challenges for your app users and that would help in increasing engagements.
Chatbot is not a new technology in the food delivery industry. A chatbot is an AI powered program which automate conversations with users without the help of a human and provide answers to the general queries of the users.
With the utilization of AI, chatbots are are not constrained to just being an answering machine. Rather, they have taken personalization to another level. Including this feature in your app can make it stand out in the market.
Personalization is crucial these days not for attracting new users but for retaining the old ones as well. Using it, your application can track and examine the activities of users to provide the personalized suggestions and messages. It can make your relationship with your customers a win-win element.
A few people require food every day or on a regular basis, or need to schedule an order for the future. Your application must have this element to enable users to place customized orders in advance. Features like this will make your on demand food delivery app development process a fruitful one.
Social media integration is another advanced feature that you can add in you app. It can help generate engagement and word of mouth marketing.
As per Statista, 37% of users look for discounts in a mobile application for food ordering. While, 26% users use the application for getting loyalty points. That’s why businesses are paying close attention to their loyalty programs these days. An incredible example is Starbucks.
Depending upon the features you are planning to add while your Food Delivery App Development, the cost to develop the same would vary. It is crucial for you to hire a Mobile App Development Company that Offers Best Food Delivery Application Development Services in order to build your dream app.
To develop the same, you will have to hire:
an experienced UX/UI designer
two Android developers
two iOS developers
and a team of two backend developers
It is also important to have a team of testing or quality assurance professionals in case of a major breakdown of the App. Using the above team structure, if you are planning to develop a robust and engaging MVP having only the “Must-Have Features” (the ones mentioned above) the cost of your on-demand food delivery application, can come somewhere around $40,000 to $50,000.
This food delivery app development cost will contain the expense of the entire mobile app development process – from design, development of apps for both platforms (iOS and Android), testing to app store optimization and launch in the market. And as you plan to add a few advanced features in your app – the cost will keep on increasing gradually.
Developing an On-demand food delivery app like Postmates is not as easy as a walk in the park. It requires extensive research on industry, market and domain. Therefore, before planning to jump into the development phase, it is crucial that you do comprehensive research on all these elements with the help of experts.
Such in-depth research and analysis will help you make a right and growth-oriented decision and will also help you to scale your business further. Want to know what to do next? Get in touch with our On-demand food delivery app development experts and start it all today!
Humane yet subtle, Naiya is a girl full of ideas about almost everything. After earning a bachelor’s degree in computer science and engineering, she decided to merge her technical knowledge with her passion for writing – to accomplish something interesting with the fusion. Her write-ups are usually based on technology, mobile apps, and mobile development platforms to help people utilize the mobile world in an efficient way. Besides writing, you can find her making dance videos on Bollywood songs in a corner. To know more, connect her on LinkedIn.