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The Rise of On-Demand Food Delivery Business

On-demand apps have seen a significant rise and have been a trending business past couple of years. The On-demand apps like Uber, Lyft, Dash, etc. have capitalized this boom to create a profitable business plan. The success of Uber and creation of similar apps and clones like UberEats Clone has got validation from the public as well as investors to create a booming industry.

Let’s get into some statistics now.

  • Four out of ten people have used On Demand in the USA.
  • More than half of the people involved in these services have improved financial status.
  • Nearly half of the consumers have an annual income of less than $50,000 and 22% have $100,000 or more.
  • Food Delivery stands at $98 billion that is the 1% of the total food market and 4% of the food sold through restaurants and fast-food chains.
  • The CAGR is estimated at the 3.5% in the next five years.
  • The industry will reach around $24 billion by 2025 by the entry of new players

Traditional Aggregator Model

The aggregator model is built on a traditional model that is used by food delivery companies offering access to different choices of restaurants to the users under a single platform. By logging in to the site or the app, users can compare menu and peer reviews on multiple restaurants. The aggregators collect a fixed margin of the order that is paid by the restaurant. However, there is no additional cost to the consumer.  An aggregator like UberEats, this is an asset-light model, earning EBIDTA margins are 40 to 50%.

New Model Of Delivery

The new delivery players are allowing consumers to have a competition to compare offerings and order meals from a group of the restaurant on a single go. This enables the new segment to boom playing a crucial role as a logistics company to the restaurant. The new delivery players will charge a small fixed fee to the consumer while having a set margin per order with the restaurant. The new players will achieve EBITDA margins around 30%. The entry of the new players will capture new accounts and allow the on-demand Food Delivery Apps to operate globally.

New Delivery Opportunity

The growth in new delivery is driven by two significant factors with regards to consumer demand.

  1. Substitution of dining in a restaurant.
  2. Enjoying the same quality of food

Consumers are drawn into the on-demand food delivery apps that were started with the traditional pizza delivery. It is estimated that 70-80% of the customers who have used new delivery platforms have managed to retain their customer. We at Appdupe will create on-demand food delivery apps that will enable you to retain your customer base with ease.  



This post first appeared on Features To Be Considered While Creating An IM App Like WhatsApp, please read the originial post: here

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The Rise of On-Demand Food Delivery Business

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