The Evolution of Online Food Delivery Business

There was a time when the online food delivery system would be considered an underdog. However, it has seen monumental growth over the last few years, and its popularity has gone over the roof. The industry has penetrated through every layer of society and has spread its roots all across the globe. 

It is difficult to think of a country which does not have this highly functional chain of online food delivery system. And as more and more millennials join the phenomenon of ordering food online, the marketplace for online food delivery grows by the minute.

Market Analysis

The global online food delivery market is driven by the convenience of ordering food by these applications, which offer an easy comparison between the menus of several restaurants. Also, these companies deliver food at the desired location at any time, which impacts the industry positively. 

The industry is finding an impetus for its growth in the ease of payment and the option to go cashless through these platforms as the consumers are increasingly seeking virtual payment options, which also offer them various discounts occasionally. 

The increasing penetration of smartphones all over the world has led to the upsurge of different online food delivery companies in the food industry as it is highly dependent upon the digital medium for its growth.

The global market is further being driven by the enormous variety of food items and different cuisines it offers at the customer's doorstep so that they can acquire the taste of several distinct dishes. 

These services help service providers extract detailed customer information to enhance their experience by developing and implementing promotional strategies. The global online food delivery industry is also driven by hectic lifestyles and rapid urbanization, leading customers to increasingly choose the service. 

The development of user-friendly food websites and applications and improved logistics are aiding the market growth further.

However, as in so many other sectors, the rise of digital technology is reshaping the market. Consumers accustomed to shopping online through apps or websites, with maximum convenience and transparency, increasingly expect the same experience when it comes to ordering dinner.

Modern Food Ordering And Delivery System

By the time, most of the restaurants have introduced toll-free numbers so that customers could call on these numbers free of cost. With the passage of time, the idea of a food ordering system was introduced which was appreciated by the customers. 

In this way, the customers could not only call the customers but also enjoy the ease of getting food delivered to their doorstep. This led to the emergence of online food ordering and delivery services. It is difficult to think of a country which does not have this highly functional chain of food ordering and delivery system. 

And as more and more millennia’s join the phenomenon of ordering food online, the marketplace grows by the minute. The online food ordering system has gained much popularity over the previous years.

How Does The World of Online Food Ordering Work ?

Two types of online platforms have risen to fill that void. The first type is the “aggregators,” and the second is the “new delivery” players, which appeared. Both allow consumers to compare menus, scan and post reviews, and place orders from a variety of restaurants with a single click. 

The aggregators, which are part of the traditional delivery category, simply take orders from customers and route them to restaurants, which handle the delivery themselves. In contrast, the new delivery players build their own logistics networks, providing delivery for restaurants that don’t have their own drivers.

We might not have to take much pain in ordering the food because apps have made it easy for us. But, there is quite a significant process that works behind getting the food delivered to your doorstep. We shall now see how the entire thing works to understand the functionality better.

There are two basic models into which the online food delivery system can be divided- the aggregators and the delivery providers.

Aggregators

Aggregators build on the traditional model for food delivery, offering access to multiple restaurants through a single online portal. By logging in to the site or the app, consumers can quickly compare menus, prices, and reviews from peers. 

The aggregators collect a fixed margin of the order, which is paid by the restaurant, and the restaurant handles the actual delivery. There is no additional cost to the consumer. With their asset-light model, aggregators post earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of 40 to 50 percent. 

Although investment continues to pour in (Delivery Hero and Foodpanda, for example, both attracted €100 million in new investment in 2015), most of the consolidation in this subcategory has already occurred. 

Four players—Delivery Hero, Foodpanda, GrubHub, and Just Eat—have achieved global scale. These four players tend to focus on different regions. On a national level, there are typically two or three competitors that dominate, mostly driven by their ability to build a large user base. 

Consolidation is advanced in most markets and will likely continue. Trawex research shows that just 26 percent of traditional delivery orders are made online today, but we expect this share to increase rapidly.

These are the business enterprises with which vendors negotiate and use their platforms to show up the listings. These aggregators receive orders from the customers and then channel them to the restaurants featured on their list.

New Delivery Providers

Just like the aggregators, new-delivery players allow consumers to compare offerings and order meals from a group of restaurants through a single website or app. 

Crucially, the players in this category also provide the logistics for the restaurant. This allows them to open a new segment of the restaurant market to home delivery: higher-end restaurants that traditionally did not deliver. 

The new delivery players are compensated by the restaurant with a fixed margin of the order, as well as with a small flat fee from the customer. Despite the higher costs of maintaining delivery vehicles and drivers, the new delivery players achieve EBITDA margins of more than 30 percent. 

Players include brands that operate globally such as Deliveroo and Foodora, which are continuing to capture new regions. 

These teams are joined together through apps that are specially designed for receiving orders. Once an order is received and routed to the respective restaurants, the delivery teams are intimated, and they shall reach the location with the order.

Tips To Make Your Online Food Ordering And Delivery Software Successful

Food ordering platforms are not just satisfying people's hunger, but are also earning huge profits. This is a reason why people are interested in investing in online food ordering and delivery software rather than any other business. 

As far as there are food and people who are craving a variety of food, this platform can never get down. But for success, there is just one need, to be unique and note the following tips in choosing your right Online Food ordering software.

Look at the following technical and marketing aspects before choosing food delivery software, make it unique and successful.

• 1. Get a custom-built website

• 2. Using a Mobile App Development

• 3. Optimized App Store and Search Engine Optimized

• 4. Start off With a Database

• 5. Expand Target from Smaller Area

• 6. Customize according to the Demand

• 7. Different Revenue Sources

• 8. Adding Unique Features

• 9. Simple Ordering Technique

• Get a custom-built website

              
The first thing you will get as an idea when planning to start a food ordering software is buying cloned scripts which are available in the market. You are right. There are numerous companies that provide cloned scripts. But a cloned script is not always enough. 

Especially when you want to make your business unique, you will need to go for the ones which give you cloned scripts along with the customization options, where you can add your own additional features for your websites according to your requirement which is not available in the cloned script. 

• Using A Mobile App Development

              
Not all of your users will be comfortable using your software via the web. The only possible way to grab the attention of the users who are involved in smartphones is by having a food ordering mobile app development. 

The mobile app is an essential way to capture a large audience. Mobile apps mostly come user-friendly and more customer-based. This is the main reason why we recommend you to choose a company which will offer you software with the mobile app as well. 

• Optimized App Store and Search Engine Optimized

                
Your online food ordering system is not just for your customers but also for search engines like Google and application stores (App Store, Play Store) which are significant in generating traffic (customers) for your software. 

If your software is not readable either by Google or the App stores, users will not be informed about your software and this will eventually lead to the downside in your revenue. This is possible only by experts with a team of designers, programmers who are skilled at designing, app developers, etc. 

• Start off With a Database

                
When you have fixed the target location, start by creating a database of the target location. Start off with the details of the restaurant located in the targeted location, menus, contact details, etc. you can partner with the local restaurants when you have a sales team who are experts to engage the restaurants who will be ready to partner with you in generating extra revenue through the delivery. Always program a website that can manage a huge database.

• Expand Target from Smaller Area

                
We understand your eagerness to start generating revenues on a significant amount. This may urge you to set a larger target area. But this could backfire you. Kick start with a smaller target area and focus on building your brand name. Once you have enough reputation for your brand, it will be easier for focusing on expansion and budget too. 

• Customize according to the Demand

                
What works for one state or city will differ from the rest of the places. This is where the importance of going according to the demands of the locals plays a vital role. Management, categorization, cuisine preference will vary in great amounts. Even the payment method preferred will be different. As per noting the importance of the target area, the software should be customized according to the local demand.

• Different Revenue Sources

Never depend only on the revenue earned through the commission earned from the restaurants and the orders. Think of different ways of generating revenue which can also increase sales. A few of the following ideas can be practiced for generating revenue:

• Charging a commission from the restaurant which wants to get displayed on the homepage and increase their sales.

• You can try your hands on fixing a monthly/weekly payment from the restaurants irrespective of the sales generated by them.

• Advertising quality content of the third-party websites and related advertisements to your online ordering system.

• Indirectly increasing the orders placed by generating referral links for the website.

• Adding Unique Features

                
Add and customize unique features and filters which will help the customers in getting relevant information about what they are looking for. Advanced search options, reviews, and ratings, live chat integration, etc can be helpful to the customers.

• Simple Ordering Technique

The end-users are the ones who will be the key player in generating steady revenues for your online ordering system. Make sure you build software that is customer-friendly and the checkout process is simple. Navigating through your software should be an easy peasy process for the customers. This will increase your customer retention.

The Evolution Of The Delivery Models:

The evolution of food delivery is set to grow exponentially with improved customer services. Using these online ordering platforms, customers can order their food via his/her mobile devices and get delivery at the doorstep. In order to succeed over this high competition, food-related businesses need to be more creative.

Moreover, the food industry must prepare itself to compete against competitors with this improved technology. Even small or medium scale businesses can rule over big giants by operating virtual kitchens in their inventory. To maximize your revenue and expand your restaurant business online, ensure to integrate such latest innovations today.

The online food delivery models have come a long way; from being an underdog to coming up with fresh-out-of-the-box renovations in their designs and layouts, there is just no stopping this industry. We have encapsulated some of this progress for you to have a look at.

• Users have an elaborate option to create their profiles on different food delivering apps

• There are a variety of designs and layouts now available for various restaurants and cuisines

• Mobile apps of these food delivery systems also have push-notifications enabled in them

• Live tracking of the parcel is now easy and simple

Conclusion

An online food ordering system has been a great way to build brands and strengthen businesses. Thus, no exaggeration to conclude that food ordering and delivery has come a long way since its outset and keeps on growing with its features it keeps adding on with every passing day. Hope you enjoyed the read. More power to you!

You can start building your business website and app with the help of an in-house team or you can play smart and opt for a ready-made and customizable food ordering marketplace platform like Trawex to have your website and mobile app up and running in no time.