“Should I order from this restaurant?” “What is the rating of this restaurant?” These have become the default questions before ordering food from online delivery apps. This change didn’t happen in one night. Online food delivery apps like Zomato, Deliveroo, Talabat, and Uber Eats are behind it for many years.
So, we figured out that the food industry is one of the largest industries in this world and will continue to expand.
All of us see food delivery apps as a medium to get food delivered, but in a real sense, they provide us convenience. It means they are offering us the ease of ordering food, easy payment options, ease of making decisions, etc.
Starting a food delivery business is not a walk in the park. You should have a clear idea about the region you are targeting. You must have a dedicated team. And, of course, what the customer trends are?
When you have the answers to the above questions, you are on your way to cheer up people with your food delivery app.
Whether it be the targeted audience or building a strong team, the primary question that comes to our mind is how one can start earning money out of the food delivery app business.
As more and more people are loving the convenience of getting food at their door, the need for food delivery apps has expanded terribly over the last few years. If we talk about the restaurants, they can reach to a broader audience while paying marginal costs for the delivery by using such services. Due to this reason, they are more likely to be a part of their business.
The business of online food delivery is becoming popular due to the ease it offers when it comes to delivering food.
Business owners of the restaurants need lots of investment right from getting the kitchen equipment to proper space. To draw more people towards the restaurant, it must be well-designed and made attractive, which means, you need more money.
If these things are not implemented adequately, it means owners of the restaurants are going to face loss for the business. So the only way out is to increase the number of orders. And, it can be easily achieved by the food delivery apps. With the inception of food delivery apps, restaurants have been able to help dozens of customers who are located far away.
According to Zomato’s report of March 2019, it registers a 225% increase in revenue in the first half of 2019”.
Basically, this is something that Zomato has achieved in a few years only.
One of the top food delivery platforms in UAE, Talabat logs 50% year-on-year growth according to Arabian Business.
Food delivery companies can earn money in many ways, and this thing has been described here:
When the restaurant does not have a delivery team, then the food delivery app can charge a fee for the same from them. The delivery amount can be some percentage of the order, or it can be on the basis of distance.
Deliveroo is one such food delivery app that makes money by this method. According to Business Insider, Deliveroo’s revenue grew 611% to £129 million with the delivery charges method.
Another form of monetizing method used by the food delivery apps is the commission percentage.
In this method, both the restaurant and food delivery app work on a commission basis and can fix the rate based on the size of the order.
For example, Swiggy charges a commission on the transactions to the restaurants. Today, the company is based in more than 300+ cities across India and aims to raise $20-25 million in revenue by the end of 2019
Deliveroo, food delivering app follow the same approach for monetization and is growing much faster.
One of the most famous methods of monetization is advertising. This method is the same as PPC. Restaurants that will pay more for a specific period of time will be shown on the top of the app.
By doing this, users will see that restaurant first before other restaurants in the list of the app. This works best for both the restaurant and the food delivery app.
Swiggy and Zomato are typical examples that use advertising as a monetization method.
This monetization method involves a delivery surcharge during peak hours. Companies like Uber Eats sets surge pricing during peak hours, for example, at lunch or dinner time. Uber Eats limits restaurants & menus and charges an additional fee to make them available at peak hours.
This approach is quite successful, and to prove this, we have a data for you.
Look at the graph below that shows the average Uber Eats income per delivery by city.
Email marketing has always been considered as the greatest asset. If compared with the other modes of monetization, email marketing comes at the top.
Food delivery apps Increase their engagement with email marketing to earn more revenue.
With email marketing campaigns, people are more likely to convert because the deals and coupon codes are available in front of them for a limited period of time.
Companies like Zomato and Swiggy sends a regular email to their customers which is, of course, attracting them to buy from their app.
If we talk about the present scenario, food delivery apps are taking the market by storm. This is one of the best businesses that you can begin right away and start earning huge revenue out of it.
As it is said, “entrepreneurship is all about solving problems,” and food delivery startups qualify this statement all because of the convenience it offers to the people.
Customers can find a number of cuisines delivered at their doorstep, and restaurants can build their brand & easily connect with a broader audience with fewer efforts. So, it is a win-win situation for both of them.
As a result, we can say that Online food delivery is a golden opportunity as proven by the success of prominent startups like Zomato, Deliveroo, Swiggy, and Uber Eats.
If you’re not far from starting an online food delivery business and want to take the market by storm, do not hesitate to contact us. Our experts are proficient enough in building on-demand apps.
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Have any queries? Feel free to get in touch with us.
November 22, 2019