On-Demand Food Delivery Platforms - Market, Trends & Opportunities

Contents

1. Who uses delivery apps at all?
2. So why do delivery apps appeal to everyone so much?
3. What do you usually order in delivery?
4. What are some business models for the on-demand economy?
5. Trends in on-demand food ordering and delivery
6. This is important! What should be in the app to order a delivery?
7. How much does it cost to develop an app for local delivery?
8. Stages of creating an application
9. Epilogue

We could go on and on about the role delivery plays in our lives. How the pandemic affected its development, etc. But what's the point? Better look at the numbers. Or on graphs, if you don’t like numbers.

Between 2019 and 2022, global food delivery revenue jumped an impressive 133% to $770 billion. Statista expects 2023 to grow 20% year-over-year, with revenue rising to $910 billion.

Statistics show that more than one-third of total revenues in 2023, or $354 billion, will come from China, the world's largest food delivery market. The United States comes next with online food delivery revenue of $231.3 billion. Close behind are the United Kingdom, South Korea and Japan with revenue of $39 billion, $38.3 billion and $35.2 billion, respectively. Statista expects that by 2027, the two largest markets will generate nearly two-thirds of global revenue from online food delivery.

Another prime example is virtual healthcare. According to PR Newswire, the global healthcare delivery market will reach $80.5 billion by 2027 and will grow by 28%. When it comes to couriers and local delivery services, the industry generated $118 billion in revenue in the United States in 2021, according to IBISWorld.

Who uses delivery apps?

I use it. My friends, colleagues. The whole world. But in fact, everyone can be divided into 3 groups:

food suppliers (shops, restaurants, warehouses)

consumers

couriers

The last ones are the most interesting. They are also called the engines of the “gig economy.” These are independent contractors (e.g., drivers, bike couriers) who work part-time and determine their own hours of work.

Many gig economy workers work for companies that provide high-demand services, such as Uber (18% of total gig economy employment), PeoplePerHour (12%), Deliveroo (12%) and Fiverr (10%).

The gig economy is a type of freelancing (the word “gig” comes from the world of jazz and means “performance,” a one-time part-time job).

The gig economy is becoming a mainstream activity. There were 15 million casual independent workers in the United States in 2019, up from 12.9 million in 2017, according to Statista. Although gig workers have been among the hardest hit by the COVID-19 outbreak, the gig economy will continue to grow. According to Mastercard, today the number of gig workers in the world has reached almost 80 million people.

Why are delivery apps so popular?

What do you usually order for delivery?

Medical products

On-demand healthcare apps connect patients with doctors. They allow users to receive comprehensive consultation using their smartphone anytime, anywhere, 24/7.

Transport and logistic

These are the well-known Uber Freight and Uber DELIVER or Yandex Delivery, which allow you to receive cargo transportation and parcel delivery services at any time. Why are they so popular?

Transportation of goods/parcels of different sizes without prior orders;

Real-time tracking;

Transparent pricing.

Ability to exchange messages with the service provider;

Fast non-cash payments;

Taxi

We simply can’t imagine ourselves without ordering a taxi through the app. Finding yourself in a country where there are no such services, you feel unprotected and with limited opportunities. The list of examples could go on for a long time: Uber, Yandex in the CIS countries, BiTaxi in Turkey, as well as Lyft, Juno, Flywheel Taxi and many others. Why do we love them so much?

GPS navigation and map navigation - you will never get lost;

The ability to find the nearest taxis and save time;

The ability to share a trip, share data, and order for another person.

Communication between drivers and clients in the application;

Feedback system allowing drivers and customers to share ratings and reviews.

Transparent pricing.

Domestic services

This is an ideal solution for those who need help with cleaning or any other work. They are not so developed in the CIS countries. But all over the world they are already using cleaning services or “husband for an hour” through applications such as TaskRabbit, Handy, Merry Maids, Homejoy and Slate.

Car sharing and car rental

Today, the lack of a personal car is no longer a problem. With rental services like Turo, Avis Car Rental, Zipcar and easyCar, you can:

Choose any available car;

Book a car for an hour or a day;

Receive roadside assistance 24 hours a day, 7 days a week;

Request delivery or pickup.

You get almost the same services if you use carsharing, for example Anytime, Hello, Belcar, Yandex Drive and others. You don't have a headache about maintenance or paying for parking spaces. You simply open the app, search for the nearest car, and use it to get from point A to point B.

Flowers and gifts

Have you heard about Uber flowers, UrbanStems, Flowwwow, Gyft or Giftagram? This is a lifesaver for those who forgot or did not have time to buy a gift, flowers, or cake. Order and the recipient will have everything delivered right to their doorstep within a short time. What are the benefits?

There are many service providers, which means a wide range of available products;

Delivery at any convenient time;

Transparent pricing.

Food

Delivery of groceries or food anytime and anywhere is nothing new. Some of the best food delivery apps include Uber Eats, Instacart, Grubhub and Doordash, Yandex Food, Wolt and dozens of others.

The benefits here are not only for users who receive their favorite restaurant dishes without leaving home. But also for establishment owners who are increasing the number of takeout orders.

What are the business models of the on-demand economy?

Enterprise to Person (E2P) / Business to Consumer (B2C)

B2C applications help customers and suppliers close transactions. Examples: McDelivery, Booking.com, Starbucks. This is how Starbucks Online allows you to order and pay for coffee in advance, avoiding the line. Other examples of this model: UberEats for ordering food, Amazon for shopping and delivery of goods.

Enterprise to Enterprise (E2E) / Business to Business (B2B)

B2B applications serve to communicate between companies and enable global transactions. Examples are Cargomatic, Eventio and Catalant.

Cargomatic is a platform that makes freight transportation easier for businesses by connecting companies in need of freight transportation with cargo owners, giving them access to available trucks and drivers.

Eventio is an application that helps companies and individuals find suitable event venues. Users can choose from a list of available venues and book additional services such as security, catering, cleaning, DJs/bands. Invited guests or the general public can purchase tickets through the app.

Catalant is a platform for project management and hiring freelancers. Companies can use Catalant to find specialized professionals on a project-based basis, allowing for more efficient task completion and workflow management.

B2B applications can also be divided into:

Vertical ⇒ serving one industry sector
Horizontal ⇒ serving several industries

Person to Person (P2P) / Consumer to Consumer (C2C)

These applications allow users on the platform to exchange products or services among themselves. Here all users are equal and are not considered entrepreneurs. This type of app is gaining popularity because it helps you save money.

Successful platforms working on this model: BlaBlaCar, eBay and Etsy. This is how BlaBlaCar helps users find travel companions. They can search for or offer trips online, specifying details of departure and arrival, type of vehicle, conditions of transportation, number of people. When you find a suitable ride, you reserve a seat and the driver receives contact information for further details.

Trends in on-demand food ordering and delivery

Unmanned delivery by drones. For example, Amazon and UPS are experimenting with using unmanned drones to deliver products.

Delivery using robots. Experiments are carried out by different market players:
⭐ Starship Technologies is developing robotic couriers to deliver food and products over short distances. They partner with various restaurants and retailers.
⭐ KiwiBot focuses on autonomous food delivery in urban areas. Their robots can navigate sidewalks and deliver orders to customers.
⭐ Amazon is introducing robotic couriers called Amazon Scouts to deliver packages. These six-wheeled robots autonomously navigate sidewalks.
⭐ Postmates, an American delivery service, introduced the Serve robot for autonomous delivery in urban areas.
⭐ Domino's Pizza is testing pizza delivery robots in some regions.
⭐ FedEx is developing SameDay Bot, a robot for autonomous package delivery in commercial and residential areas.
⭐ Yandex in Russia is experimenting with robots to deliver groceries and goods within certain urban areas.

Delivery in self-driving cars. This trend will not be implemented soon, because all such vehicles are still only at the testing stage. But, most likely, the delivery of products will be one of the first areas in which they will be introduced. Currently there are the following players on the market:
Waymo, Nuro, Uber ATG, Amazon Scout, Ford, Tesla and Baidu Apollo, which is developing the Apollo platform for autonomous vehicles and testing it in various scenarios, including delivery.

Subscription-based models. Take HelloFresh, a grocery delivery service that offers meal kit subscriptions and meal prep recipes. Or the similar Blue Apron. There's also Dollar Shave Club, a subscription company for razors and body care products.

Increasing number of payment methods. We wrote an article about this “I Pay What I Want.” Read on our blog.

Haunted/cloud kitchens. This direction, which is developing in parallel with ordering applications, will receive new impetus in the future. So among the predicted trends:

Creation of specialized brands. Ghost kitchens may focus on creating concepts to cater to specific kitchen styles or foods, such as chains specializing in burgers, pizza, vegan cuisine, etc. For example, Virtual Dining Concepts.

Opening small, highly efficient kitchens in strategic locations with high delivery demand to save on rental and management costs.

Using data to optimize menus, prices, lead times and more to better meet market demands.

Implementation of automated systems, robots and other technological solutions to improve the efficiency of preparation and delivery processes.

The most popular example in this direction today is ⭐ CloudKitchens, which is a platform that provides infrastructure for creating and managing ghost kitchens.

Virtual assistants and recommendations based on artificial intelligence. We also discussed this topic in detail in the article “AI in food technology.” Check out our blog and don't forget to bookmark it!

It is important! What should be in delivery application?

The most common practice is to create separate applications for each user: customers, couriers and business owners. Let's look at them all.

Consumer Application

Apps for business

Application for couriers

How much does it cost to develop a local delivery app?

Do you want to develop your own grocery or food delivery app? Or maybe you're more interested in something like Uber, but don't know how much it will cost? Let's try to calculate.

We recently created a platform for delivering dishes from restaurants “Tik-Tak”. This app helps customers order their favorite food to their home. The development also included creating an app for restaurants where they could accept and track orders in real time.

In total, it took us 2,150 hours to create the application:

backend development: 800 hours;
iOS development: 300 hours;
Android development: 350 hours;
UI/UX design: 300 hours;
QA testing: 400 hours.

Another example of an on-demand application that we created would be the Easy Style P2P platform. With its help, ordinary users can search for manicurists, hairdressers and other beauty specialists by location and reviews.

In total, it took us 2,600 hours to create the application:

backend development: 1200 hours;
development for iOS: 400 hours;
Android development: 400 hours;
UI/UX design: 200 hours;
testing: 400 hours.

Stages of creating an application

First you need to decide what role you are going to play: an aggregator like Glovo, a restaurant chain, or a group of restaurateur friends banding together to make their delivery. Will you develop according to the Saas model or in addition to your brand?

This generally does not change the development requirements, but it does change the priority in features.

Let's try to look at the main problems that delivery services are currently facing.

Logistics optimization

The main task of all times is to optimize the workload of couriers. With a minimum number of couriers, deliver products to the largest number in the shortest possible time.

What can we offer here? For example, build a solution on top of https://mapsplatform.google.com/solutions/transportation-and-logistics/ using Google API. You can use Open Street Map and build your own logic. We’re experienced in both. It all depends on the task.

Most often, custom solutions are built relying on some geoservices (google maps, open street maps). There may be scenarios in which delivery is not lightning fast, but, for example, the next day. Or maybe you have tasks like: there are 4 couriers who are constantly in dynamics, and you need to manage the load between them in real time and determine from which points it is best to transport orders. Each business has its own logic, its own characteristics, so it is necessary to customize solutions for each.

Tracking couriers, production chains in real time

To control standards, analytics, forecasting, and better customer experience, it is important for us to understand at any given time where and what is happening with us.

In the case of food delivery, the chain looks like this:

1

the order entered the system, then, depending on the process, (most often) the manager processed and accepted the order, sent it to production.

2

order movement in the kitchen, here they use a solution for tablets, where each stage of production is tracked and moved, as if on a Kanban board.

3

couriers have their own apps, in which they see optimized routes, track orders pick up and set off. Tracking most often occurs by scanning a QR code on each order. So the flow looks as follows: arrived, scanned the package/box on each code and went to deliver.

Thus, we understand where each order is located at every second. Based on this data, we see and eliminate bottlenecks.

Rapid network scaling: hiring, training, quality control

For some reason, many people miss such a moment as hiring and training employees - this is also important in the food industry.

It is necessary to take care of training employees, familiarize them with updated regulations and menus, conduct periodic certification, monitor sanitary documents, and check how well employees know and comply with customer service standards.

All this can be on third-party services, or maybe inside your system. Some people still have it on papers and in notepads.

Getting to know the new range

Quite a lot of wine and food producers are faced with the fact that people get used to one assortment, and it is difficult to introduce new items into the assortment. Here, in addition to marketing, mechanisms automated in IT solutions can help, where, based on past data about the client, you can make him the best offers from new products.

Personalization

The topic is close to the previous one. But here we are not even talking about upsale, cross sale (you already know about them), but about regular purchases, when the client buys the same thing. Predictions of regular purchases based on purchase information, consumption rate and expiration date. And also the use of AI for recommendations, for example, in the case when a person does not know what exactly he wants.

Dealing with food that's about to go bad and leftovers

There are several trends in how food delivery app development can help you promote a more sustainable and responsible approach to food distribution and reduce food waste.

1

Charity and partnership platforms:

Some food delivery apps partner with hunger relief organizations or charities to donate leftover food. This allows food that might otherwise be wasted to be used to support those in need.

2

Donation programs:

Other apps allow restaurants and food providers to participate in donation programs where they can donate leftover food to charities or community kitchens.

3

Discount systems for balances:

Platforms can implement discount systems or promotions to sell leftovers closer to the end of the working day. This encourages shoppers to purchase products at discounted prices, reducing the likelihood of food being thrown away.

4

Management programs:

Applications can offer functionality that helps restaurants and cafes effectively plan and manage inventory, minimizing waste and excess inventory.

5

Product processing platforms:

Some apps and platforms are developing schemes to recycle leftover food, for example by offering discounts on products that can be used to create new dishes.

6

Support for local manufacturers:

Apps can actively support local producers and farms, which promotes the marketing of their products and reduces the risk of throwing away unsold goods.

7

Educational initiatives:

Apps can conduct educational campaigns among restaurants and delivery partners, teaching them how to effectively manage leftovers and the nutritional value of food.

Loyalty programs

It is not necessary to implement a loyalty program “head-on”, although they certainly work. We have already shared various cases from our practice. But there are also subscriptions that provide unique benefits to visitors, and you – a permanent audience, which is more convenient to control and understand its size

Epilogue

At the same time, I don’t think that things like chatbots and AI can greatly revolutionize the market right now. It's more of a fight for the last 5% of the audience. What is more important is service, brand, niche, region. If everything is clear here, you can think further.
Many build their delivery precisely because they want to provide customers with a high level of service that they can control and manage, like Dodo.

Expand your delivery business now with dev.family. Drawing on our own experience in creating on-demand platforms, we will help you create reliable food delivery that meets the needs of both restaurants and customers. We'll help you stay competitive in the ever-evolving foodtech industry.

On-Demand Food Delivery Platforms - Market, Trends & Opportunities

Who uses delivery apps?

Why are delivery apps so popular?

What do you usually order for delivery?

Medical products

Transport and logistic

Taxi

Domestic services

Car sharing and car rental

Flowers and gifts

Food

What are the business models of the on-demand economy?

Enterprise to Person (E2P) / Business to Consumer (B2C)

Enterprise to Enterprise (E2E) / Business to Business (B2B)

Person to Person (P2P) / Consumer to Consumer (C2C)

Trends in on-demand food ordering and delivery

It is important! What should be in delivery application?

Consumer Application

Apps for business

Application for couriers

How much does it cost to develop a local delivery app?

Stages of creating an application

Logistics optimization

Tracking couriers, production chains in real time

Rapid network scaling: hiring, training, quality control

Getting to know the new range

Personalization

Dealing with food that's about to go bad and leftovers

Loyalty programs

Epilogue

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