Restaurants have lost their monopoly and synonymy over food. People do not have to any longer visitor restaurant to experience and enjoy the exclusives of that particular place. They can do so in the convenience and comfort of their homes. This change can only be attributed to the favorably alarming growth of food delivery services.
Food delivery services are an offshoot of location-based on-demand business. What started with Uber for taxi booking has trickled down into almost every sphere of our lives including food, hyperlocal services, beauty and even dating.
Food is one of the most essential needs for any human being, and the food delivery industry will survive as long as there is a need for food.
Fun Fact – Pizza Delivery
The first pizza delivery in history was made by the Italian Chef Rafaello Esposito for the king of Italy, Umberto I and his Queen Margarita. He created a pizza topped with mozzarella cheese, tomato, and basil, to signify the colors on the flag of Italy. It was in the year 1889! 2019 marks 130 years of Pizza delivery!
Coincidentally, the Chef not only heralded pizza delivery but also give us the Margherita Pizza which is named after the queen for whom he made that special dish!
The Numbers That Will Make You Drool
Uber had found success with ride-hailing. In 2014, Uber was rapidly spreading across the world and was hailed as one of the most innovative companies on the planet. In spite of all of the success, Uber still chose to enter into the world of food delivery and started UberEATS in 2014. This shows how promising the market for food delivery is!
McKinsey has determined that the food delivery market stands at a staggering $92 billion. That is just about 1% of the total food market in the world and 4% of the total food sold through restaurants.
In line with internet penetration in different countries, there are giants who dominate the food delivery market in every place. The market value of the top 5 food delivery companies stands more than a billion dollars. According to Forbes, the food delivery market is all set to be a $200 billion industry by 2025.
The Different Business Models
Often, when we think about food delivery, we always believe about it is a monotonous concept. However, within the realm of food delivery services, there are different business models that you can consider.
The aggregator model
By a distance, this is the most prominent model for food delivery. There are 3 entities in the aggregator model – the user, restaurant and delivery executive. All three entities are connected by a platform that aggregates the restaurants by location. In essence, it is a location-based on-demand service.
Zomato and UberEATS can be considered as good examples of this model. The user can order from the restaurant menu that is displayed on the app. Once the user places an order, both the restaurant and the delivery executive are sent a notification. The restaurant prepares the ordered food and the delivery executive picks them up and delivers it to the user.
The platform provider takes a commission from the restaurant for bringing in additional sales. They pay the delivery executive according to the distance traveled and the number of deliveries executed.
The restaurant-centric model
In this model, the restaurant partners with delivery service providers. The user can directly contact the restaurant and ask for the food to be delivered to their home. The order can be placed either through a call or an app.
The restaurant can ask the delivery executive for the food to be picked up from their place and delivered to the customer’s homes. It is to be noted that there is no platform that the customer is aware of. They only contact the restaurant. The restaurants, on the other hand, can choose to pay the delivery service provider on a retainer basis or on a per-order basis.
The Birth of Cloud Kitchens
The availability of delivery services meant that you do not any longer have to go to a restaurant to experience the food. In short, the utility of the restaurant has been reduced to the kitchen. What if a restaurant delivers just the food cooked in its kitchen without offering dining services?
This kind of business model results in the restaurant focusing just on the food and not on the peripheral aspects. This also saves a lot of real estate space in addition to the cost that needs to be spent on designing the interiors and preparing the dining furniture.
These types of kitchens are called cloud equations. They are nothing more than a fully functional kitchen focusing just on the production of food. The food delivery applications would mean that people can order food from here and have it delivered to their homes. Food delivery businesses have given a huge boost to these cloud kitchens!
The Attributes Of A Food-Delivery Customer
A customer who orders food for delivery is markedly different from a customer who dines in a restaurant. A dining customer wants an experience whereas a customer who orders does not want anything more than food. In addition to the end product that they consume – the food, the customers also need to be looked at as customers of the food delivery platform.
Once a customer downloads and application, it is quite possible that they will stick to it for a considerably long period of time. Research has shown that 80% of the customers do not leave their favorite platform for other platforms once they sign up for one.
Time is a critical factor when it comes to customer-stickiness. More than the price, customers are quite likely to stay addicted to your platform for the swiftness in delivery.
Although there might be instances where users order food for parties or friends, 82% of the delivery orders were placed from homes and for homes. Workplaces also contribute to a significant chunk of the remainder.
All Set For Business
The projections, the customers, the different business model and above everything, the possibility of profits – all of them prove that food delivery applications are here to stay. There is still a lot of space in the market for new players to come in and make their share of profit. There is also a chance for evolving a new business model by keeping the skeleton of food delivery a constant.
If you are one of those aspiring entrepreneurs who would like to create their own food delivery app, you can always choose to go with food delivery app clones. UberEATS Clone scripts are readily available in the market. The right company for developing your Uber clone app will also take care of customizing the application according to your requirements, so it bears the language of your brand.