During the covid-19 pandemic, the demand for on-demand food delivery has grown exponentially. With more and more innovations based on technology coming into play, consumers are switching heavily towards e-shopping and online food delivery.
According to a new report by Boston Consultancy Group (BCG) and Google, on-demand food delivery business is expected to grow at a staggering rate of 25-30% annually to touch approximately USD 8 billion by the end of the year 2022. With fast food and ready-to-eat (RTE) food becoming a new way of life for most of the urban population due to hectic work schedules and work-from-home norms, this trend is expected to see an upward trajectory in forthcoming years.
So if you are planning to enter this multi-billion dollar food industry and exploit the profit opportunities created by this business, here is a guide on how to start your on-demand food delivery business from scratch.
How to launch an Online Food Delivery Business:
Finding a Niche
The first and foremost thing before embarking on your on-demand food delivery business is to find a niche for your business. Several online food delivery companies are competing with one another, so how can you make your place and stand out in the food delivery market.
You can carve a niche for your online food delivery business by:
- Focussing on specific types of cuisines
E.g., if you have expertise in Italian or Mexican you can use your culinary skills to provide the best variety to your customers.
- Preparing quick snacks and targeting teenagers and college students
- Opting for full-course home-cooked meals for couples and families
- Serving lunch tiffin’s and packaged food for working professionals
Besides this, you can also create a niche for your business by wrapping food in plastic or aluminium foil, or washable reusable food containers. Since the onset of the pandemic, people prefer to eat well-packed hygienic food.
Secure a Financing Option
Once you have done with finding a niche for your online food delivery business the next step is to develop a business plan that covers all the areas that need external funding. Outline all the major requirements, such as setting up a cloud kitchen, buying equipment for delivering food, food delivery apps, creating a strong delivery network and building your brand value. You can choose to finance the business by:
- Your personal savings,
- Finding an investor cum partner
- Taking a loan from a trusted bank.
Obtaining Licenses
The next relevant step in the journey of setting up an on-demand food delivery system is to obtain the requisite licenses that are necessary for starting an online food delivery business in your area. Some of these included the following:
- Business licence/ Certificate of incorporation,
- Tax identification number/ VAT registration
- Food License (As applicable in your country)
You need all of these security permissions to comply with laws and regulations applicable in that area.
Creating a Website
To deliver better and in a consistent way, it is important to leverage modern technology effectively. If you follow the old techniques such as telephone delivery or taking orders on a mobile phone, you might be lag behind.
You can scale up your business rapidly and achieve the desired success by developing a website to showcase your products in a compelling way so that consumers can easily browse their favourite products and place an order instantly. People generally prefer to use those websites which are responsive and easy to navigate hence make sure to make your website responsive and easily navigable.
Get reliable Delivery Persons
Only creating a website and an app to display lip-smacking food is not enough, you need a strong network of delivery persons to take that food to the customer’s doorstep. For this, you can hire reliable delivery personnel who will be responsible for transporting and delivering hot food to the customers. Also, make sure to equip this delivery personnel with the latest gadgets and a two-wheeler so that they can keep track of time and ensure that orders reach on time.
Develop a Robust Marketing Strategy
Lastly and most importantly, chalk out a robust marketing strategy for your business. Without this, all your effort to set up a successful online food delivery store will go in vain. Along with quality products, top-notch services and a state-of-the-art online ordering system, it is equally important to get the word out about your business to potential customers.
Here are some top Marketing Ideas to promote your Online Food Delivery Business
- A digital marketing channel is a sure-shot way to reach your target audience. You can link your website and business logo to social media sites such as Facebook, Instagram, WhatsApp, Twitter etc for promoting your business.
- Collaborate with food bloggers and influencers. These people generally have huge followers on social media and people tend to believe their opinions on food-related matters. Therefore collaborating with these people for reviews and referral links will help you to draw huge traffic o your business website.
- You can also use traditional marketing methods of advertising like door-to-door distribution of posters, flyers, pamphlets etc. Additionally, you can create a menu card and offers of your mouth-watering dishes and place them inside the local newspaper.
- Indulge the viewers through some giveaways by offering them discounts like buy one get one free to create a buzz about your newly introduced food items. This will help you to create a positive perception of your brand and your business
Curating a Food Delivery app for your Business
You might be wondering when you have your own website what is the need for an app. Well, a website is a great way to showcase and promote your company’s products but when it comes to building rapport with customers mobile apps score a point over websites. A mobile app gives you direct access to your customers’ smartphones or a tablet. This not only boosts the conversion rate but also gives you a chance to directly market your brand and products on their devices. Besides this, most apps offer an offline mode feature that enables the consumer to access the app in the absence of the internet.
Few Important features that your on-demand Food-delivery app must have:
- On-demand Food Ordering push notification: Sending push notifications is the best way to keep in touch with your customers. You can use this feature to send various information such as discounts on the new offering, special offers and location-based order drop messages.
- Providing Contact information for Delivery Personnel: After placing an order the consumer might want to know the name and contact information of the delivery person. This feature allows the consumers to contact the delivery person and track their order status.
- GPS Tracking in Real-time: This is one of the essential features that your food-delivery app must-have. By using real-time GPS customers can track the status and location of their ordered food item.
- Simple Payment Methods: To make payment procedure highly productive and uncomplicated you must list all the payment options such as Google Pay, Apple Pay, iOS PayPal account, credit/debit card, internet banking and cash on delivery (COD)
- Order History: This feature allows you to maintain the record of customers orders, past and current. It includes shipping, delivery and payment details. Using these data retailers can get a clear sense of who their customers are, what they buy, when they buy and how they buy.
- Profile Customization and Registration: This feature allows the customer to create, edit and delete their profile. A user profile contains critical information of the customer such as their name, age, hobbies, lifestyles, interests etc. You can use this information to create personalized marketing campaigns.
How YRC can help you make an on-demand Food Delivery app
At YRC, we understand how to idealize and create a tailor-made on-demand food delivery app for your business. With tons of experience under our belt, we can help you to leap forth in the online food delivery market with a mobile application that offers an unparalleled experience. Talk to YRC team of experienced process experts to know more about best practices suited to your food delivery business model.