As food delivery enjoy dramatic growth recently, on-demand food delivery app development is becoming the trend globally, bringing success to many startups.
Since on-demand ride-sharing services got mass popularity across the world, many businesses build their own billions of dollar empires as Uber, DoorDash, Grab, and JustEat. Research shows that roundly 51% of on-demand business have expectedly positive profits in 2020. Besides, the total market valuation of on-demand delivery in America accounted for approximately US$ 110 billion in 2019 that the average growth rate is reported at 18% annually.
Furthermore, in spite of several companies are facing serve downturn, on-demand food delivery service is one of the minority sectors remaining profitable due to the coronavirus outbreak. According to STOXX, the stock value of some selected food delivery company grew up by roundly 10%, while the total trend of the market went down by 12% in April 2020.
Indeed, the demand for on-demand food delivery app development expectedly on the rise, which becomes the future of the food and beverage industry. If you have the plan to enter the food delivery industry, here are what you need to know regarding business models and how to solve some common challenges.
Related article: How coronavirus outbreak changes online groceries services and food industry globally
Aggregator On-demand Food Delivery App
The earliest pattern of the on-demand food delivery market tends to be a bridge of customers and local food shops. In which, users can access an online food delivery market to browse several restaurants in only one webpage or a mobile app. The aggregator food delivery platform will display the restaurant information, including name, location, menus, rating, and prices.
Basically, once customers wanted to place an order, the aggregator platform would redirect to restaurants and food business pages. Then, the restaurant would handle the delivery task with its own shippers.
How do platform Food delivery services work?
The fundamental function of an Aggregator food delivery platform seemingly allows customers to visually compare the menu and services of several restaurants in a single interface. In practice, restaurants have an option in partnership with the delivery platform that they can entirely rely on its services from the platform or their own shipping fleets.
From the restaurant owners’ perspective, using a services delivery platform might be beneficial since the cost of shippers’ wages, software for movement tracking, vehicle maintenance, the risk of return shipping, and more would be the platforms’ responsibility.
So, how an aggregator Food delivery Platform make money? Indeed, there are several ways to gain profits. Whereby, the typical model is that the platform will charge both customers and restaurants a margin for each successful order, along with the separated delivery fees. A restaurant searching for a rapid increase in revenue could pay a fee to the platforms as a kind of promotion to be displayed above other players.
Related article: ERP system for Food industry – opportunity and challenge
Potentials and Challenge
| Advantage | Disadvantage |
| Customers have diverse options when selecting restaurants and dishes. With reviews and ratings from previous users, they have more evidence to choose a good seller. | The platform is not responsible for food quality. |
| Restaurants have better controls delivery schedule. | High margin cost might induce higher prices for foods, which both customers and restaurants need to pay. |
| More technologically focused cause the platform only provides food tech solutions not cooking dishes. | The platform will not control the payment process since customers check out in the restaurants’ private sites. |
| No need to afford sanitary standard. The platform might require restaurants providing legal documents. | Restaurants could lose a relationship with customers. They have to rely on the platform to connect. |
Must-have feature
| Feature | Description |
| Customer Dashboard | Database of restaurants, menus, and users’ reviews |
| Sign up/ sign in | Custom customer and partners pages |
| Card orders | Select food and place orders |
| Customer support | Realtime chat, email integration, order confirmation |
| Payment modules | Transaction and check out the flow |
| Integrated mobile wallet | Top up money and collect extra point |
| Push notification | Notify users regarding news and promotion |
| GPS tracking | Shipment movement tracking |
| Review and rate | Allow users to leave a comment and rate the restaurants |
| Analytics | Order and performance tracking |
| Order history | Display previous orders and status |
Peer to peer food delivery marketplace
Similar to Aggregators services, peer to peer food delivery marketplace also allows users browsing target restaurants and dishes. However, while aggregator apps made many users find it inconveniences when it takes an extra step to another site for check out and delivery process. Additionally, not all restaurants have their own couriers as several small food shops cannot afford it due to a few online orders. As a result, the delivery marketplace was born to solve this trouble by providing third party delivery services.
How does a food delivery marketplace work?
The food delivery marketplace also charges customers and restaurants margin fees for using its service. Additionally, since the marketplace holds the delivery process, the revenue from delivery services will belongs to the platform holders. By which, the margin fee from the delivery marketplace might relatively lower than the food delivery platform. In this field, UberEat and GrabFood tend to be the market leaders in America and Asia.
Potentials and Challenge
| Advantage | Disadvantage |
| Customers have diverse options when selecting restaurants and dishes. With reviews and ratings from previous users, they have more evidence to choose a good seller and shippers. | The delivery marketplace is not responsible for food quality. It only takes charge of delivery services. |
| More technological focused cause the marketplace only provides food tech solution not cooking the dishes. | The restaurant might encounter late in payment as money is sent to marketplace accounts. |
| No need to afford sanitary standards. The platform might require restaurants providing legal documents. | Restaurants lose relationships with customers. They have to rely on the platform to connect. |
Must-have feature
| Feature | Description |
| Dashboard | Customize the site to customers, shippers, and sellers |
| Sign up/ sign in | Manage users’ account |
| Maps navigation | Help shipper located restaurants and delivery address |
| Communication support | Realtime chat, email integration, order confirmation |
| Call/message | Users communication regarding orders |
| Payment modules | An intermediate to protect three parties |
| Integrated mobile wallet | Top up money and collect extra point |
| Push notification | Notify users regarding news and promotion |
| GPS tracking | Shipment movement tracking |
| Review and rate | Allow users to leave comments and rate the restaurants and shippers |
| Group ordering | Allow customers in near locations sharing shipping fee |
| Bill splitting | Allow multi-payment method |
| Order history | Display previous orders and status |
Full-stack on-demand delivery mobile app
For rapidly growing restaurants, hiring a software development company to develop a custom on-demand delivery software refers to the appropriate way to manage and protect the business. Bu which, full-stack on-demand food delivery business have their own restaurants with in-house chefs and their in-house couriers with in-house shippers. KFC, Mc Donal, Domino Pizza are three typical examples of full-stack delivery services.
Related article: restaurant online ordering system – powerful software for fast-growing restaurant
How Full-stack On-demand Food Delivery App perform?
By having full control of both business processes and customer experiences, restaurants enjoy flexibility due to the direct interaction with customers and shippers. By which, it handily manages the services and time adjust when encountering any errors throughout the process. Additionally, since there are no margin costs, restaurants could directly set the prices to maximize the business’s goal.
Potentials and Challenge
| Advantage | Disadvantage |
| Having full control of food quality and sanitary. The restaurant takes responsible for cooking the dishes then control the whole process. | Restaurants need to pay for cooking materials, salary to shippers, software development, and maintenance. |
| Full control of delivery timing, reduce the pause times of shippers when confirming orders with chefs. | Need to handle the sanitary standards other obligations with authorities. |
| Building its own customers relationship | Need to invest in IT and manage a strong team to smoothly run the software. |
| Timely update menus to adapt the demand via behaviour tracking. | Not have the vast user community in the beginning. |
Must-have Features
| Feature | Description |
| Admin Dashboard | Display orders information, users, and performance status |
| Sign up/ sign in | Allow customers to create and access their account |
| Data visualization | Analyze customers behavior and growth |
| Communication support | Realtime chat, email integration, order confirmation |
| Transaction history | Review past orders, payment process, ID, profits |
| Payment modules | An intermediate to protect three parties |
| Integrated mobile wallet | Top up money and collect extra point |
| Push notification | Notify users regarding news and promotion |
| GPS tracking | Shipment movement tracking |
| Order cancellation | Manage orders approved or rejected by the managers |
| Billing summary | Allow customers to review their orders |
| Bill splitting | Allow multi-payment |
| Franchise management | For franchise restaurant chains |
| CRM | Integrate with Customer relationship management software (CRM) |
| Re-order | For placing the same order at multiple times |
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