As per Statista, US$7,092M is the revenue from the Online Food Delivery segment in 2019; and is expected to show an annual growth rate (CAGR 2019-2023) of 9.9%, resulting in a market volume of US$10,363M by 2023.
Food business also faced the downtime because of not serving customers at its best. There is a lot to take care of, especially in case of food startups; the quality of service, taste, speed, variety, ambiance, hygiene and what not!
Unless people are visiting some hotel with the classic ambiance, people mind waiting for long hours outside the restaurant in a queue. And, food delivery startups came up with the blessing in such condition. Come on, now, you can enjoy your delicious meals anywhere in the city without traveling to the place or waiting for hours before. I bet nothing can be better than this comfort of getting the food delivered to you at your comfort and that too within the budget.
But, how do they manage this affordable food delivery? Don’t you think these food delivery startups actually have strong financial backend ready for them?
Well, it’s not a big deal! There are numerous investors showering their blessings upon these food delivery startups. Let me share you interesting reasons behind this love of investors:
Increase in Growth Revenue:
From the initial days till today, there isn’t any time of looking back. The count of orders may vary in months, but it increased substantially every year. The accelerating growth revenue is a vital factor that invites investors to generate their income with innovative business ideas. GrubHub witnessed the growth in revenues of $288 million in the fourth quarter of 2018. It was a 40% year-over-year increase from $205 million in the fourth quarter of 2017. Year-over-year gross food sales of the company also grew from $1.4 billion up, from $1.1 billion in the same period last year.
The Time Frame:
The inspiration for following the stringent time frame came from Dominos. When it comes to opening a restaurant/hotel your internal services make your score. But, with the food delivery business, the minimum delivery time is the key to success. Usually, when the restaurant’s offer home delivery services, they lag in timely delivery. As the delivery time displayed used to be less than the actual time taken. Majority of food delivery startups followed the strict time frame of delivering the food, mostly within 30-40 minutes. Easier said than done. Isn’t it? But, when they keep up with their words, they gained the attraction of more money investors.
Food delivery startups love walking hand-in-hand, especially with other food startups. Maybe, this sounds challenging or a risky game to trust some newbies in the market, but they believe in quality over the number of years of establishment. In a way, these platforms that offer equal business opportunities to startups as well as established restaurants/hotels. Food delivering businesses grow at an amazing rate because of cross-channel marketing. When an old traditional restaurant leverages food delivery platforms, it grows the trust of people upon those applications. With the increased customer rating, when food startups come on board, customers order because of the business authentication. This way, food startups are growth accelerators for a range of food businesses.
With the food delivery business, you need not to look for buyer persona, just ask yourself, “How you want to get your food?” You may have the thoughts like food should be hot, delivered on time, properly packaged and sealed and obviously free from any kind of foul smell with free or low delivery charges. Even the smaller things matter here, and there is always room for improvement based on customer reviews. Though restaurants aren’t directly interacting with customers when placing orders, but food delivery apps allow this communication if the customer wants to. That’s the level of transparency that these businesses manage, which in turn increases the trust of customers.
Independent Delivery Fleet:
Food delivery business is just like any other logistic business, however, this one is restricted within the city. Lesser the delivery time you want to manage, stronger the team of delivery personnel you need to manage. Now, food delivery businesses started managing their independently driven delivery team for food delivery services. In turn, they are offering services like trouble-free and easy and quick delivery, no minimum order value and live order tracking with integrated GPS. That’s pretty nice, gone were the days when we were just checking how far is the cab or bus, you can track your food orders as well. This assures investors that these food delivery companies are offering the same quality of services they are claiming. Obviously, you will make more happy customers, which in turn increases ROI.
Festive Food Offerings and Membership:
Though food delivery businesses gain orders on a daily basis, they know that people adore them more on weekends and festivals. With the huge discounts and coupon codes, the generate more customer traction. In the case of Zomato, customer loyalty bonus like piggy bank points made a score, then the Gold subscription was a huge business hit. Such fascinating marketing strategies from the team excite the investors more than the usual business plans.
Invite Investors to Your Business
When launching your food delivery startup, you can count on these ideas to invite investors. But, if you plan with your business USP with this and backup answers of all “WHY” and “HOW”; you can get better results. People love results over theoretical business plans and that’s how your action can get easier reactions with a love working business idea.
About The Author: Yuvrajsinh is a Marketing Manager at Space-O Technologies, a firm having expertise in developing food delivery apps. He spends most of his time researching the mobile app and startup trends. He is a regular contributor to popular publications like Entrepreneur, Yourstory, and Upwork. Apart from that, he connects recruiters to job seekers in India. He has, in fact, helped 18 candidates last month to get a new job. Connect with him on Twitter and Linkedin.
Feature Image: Thanks to Author Yuvrajsinh Vaghela