Last Updated: 05 June, 2024
The online food delivery industry is constantly growing. As per Grand View Research, the online food delivery market was valued at USD 254.52 billion in 2023 and is forecasted to reach revenue of USD 505.50 billion by 2030, growing at a CAGR of 10.3%. Considering the statistics, the market provides many opportunities for entrepreneurs to start a food delivery business.
Online food delivery platforms like Just Eat and Delivery Hero have emerged as industry leaders, pioneering successful online food delivery businesses. If you are also thinking of starting your own online food delivery business like Just Eat and Delivery Hero then this is the right time to do it.
Thus, to help you out, we are providing a comprehensive guide on how to start your online food delivery business like Just Eat or Delivery Hero. Let’s begin.
As Just Eat and Delivery Hero are the most popular food delivery marketplaces, the majority of entrepreneurs prefer platforms based on similar business models. With these two as the industry’s most sought-after food delivery business models, we will understand the workings of both Just Eat and Delivery Hero.
Both, Just Eat and Delivery Hero have emerged as the leading food delivery platforms accounting for more than 50% of the total revenue generated by the online food delivery industry. If we look closely, both services have followed a technology-driven approach. Let’s understand their workflow.
Process Flow of Just Eat
Just Eat operates on a matchmaking business model where it connects restaurants with food lovers looking to get their food delivered to their doorsteps. Consumers can order food from nearby restaurants listed on the platform. The restaurant then fulfills the order requests and delivers food to the consumer’s address. In some cases, Just Eat also handles the delivery. After the order completion, the restaurants pay a commission on orders to the platform owner.
Next, let’s explore the process flow of Delivery Hero.
Process Flow of Delivery Hero
Delivery Hero works on a business model where the customers, restaurant partners, and delivery partners, are connected on a single platform. The restaurants pay a monthly fee to register on the platform. The customers place the order as per their food requirements. Furthermore, the Delivery Hero provides logistics facilities to restaurants for delivery. Later, after the successful completion of the food order, the restaurants pay a commission to the platform owner along with the delivery fee.
Now that, you have understood the process of both platforms, next, let’s gain insights into the business model of online food delivery businesses like Just Eat and Delivery Hero.
To build a website like Just Eat & Delivery Hero, you must be familiar with various business models present in the industry on which online food delivery platforms work. Choosing the most appropriate business model that meets the requirements of your food delivery business is the first step towards launching a successful marketplace.
The standard and most popular business model of an online food ordering and delivery system can be explained considering the four main entities of any such platform:
In most of the food delivery business models, admin is the business owner who has complete ownership of the marketplace and is in charge of validating account creation requests from various users.
Some of the main roles of the admin are:
User Management: Admin is responsible for managing users on the platform including customers, merchants, delivery personnel, and affiliates.
Restaurant Management: Admin manages the restaurants listed on the food delivery platform. They can seamlessly add or remove restaurant.
Commission Management: Admin sets the commission rates for partner restaurants, including service charges, VAT, discounts, and more.
Ratings and Review Management: Admin can monitor reviews on the platform and can mark them as active, inactive, or inappropriate.
Content Management: Admin is responsible for providing a seamless user experience and they manage the content such as blogs, FAQs, banners, and navigation of the platform as per their requirements.
Reports and Analytics: Admin can analyse the reports related to sales, signups, visitors, orders, affiliates, and more, and can make data-driven decisions.
Offers and Deals Management: To improve the customer engagement and retention rate, the admin can create offers, deals, and loyalty programs.
Define location: This allows the admin to define the specific area they want to serve depending on the demographics statistics and their business plan.
Merchants also known as restaurant partners play an important role in the success of any online food delivery business. Merchants register themselves on an online food delivery marketplace to serve a broader customer base. Following are the roles performed by merchants on an online food delivery platform.
Registration: Merchants register their restaurants on the platform by sending a registration request to list their food delivery services on the platform. The merchant can list single or multiple restaurants depending on the subscription packages availed by them.
Order Management: Merchants manage the orders in real-time. Restaurants can easily handle order modifications, cancellations, and refunds, ensuring a smooth experience for customers.
Payment Tracking: Restaurants track their total orders, earnings, sales, and other insightful data to monitor their performance.
Delivery Tracking: Restaurants can track their delivery fleet, access the driver’s live location, and share the estimated time of delivery with customers.
Customers are the first priority in any type of business, especially if it is an online food delivery business. A growing customer base will determine the future and growth of your business. Therefore, build a food delivery platform that meets the demands and requirements of the customers. Following are the functionalities availed by the customers on a food delivery platform:
Registration: Customers register on the marketplace through their email address or social login options. They can create their profile by adding the necessary details.
Location Selection: Customers use GPS to detect their current location or manually enter the delivery address.
Restaurant Selection: Customers search for their favorite restaurants through advanced search options to place their orders conveniently. The order placed by the customer is received by the restaurant directly.
Menu Browsing and Ordering: After selecting the restaurant, customers can view the menu, select items, customize orders, and add them to the cart.
Checkout and Payments: The customers complete their order by making the payment via various payment options offered by the food delivery platform.
Order Tracking: Customers can track the status of their order, and its estimated delivery time.
Ratings and Reviews: After successful completion of the order, customers can provide ratings and reviews for the food and the restaurants.
Delivery personnel plays a crucial role in ensuring the food reaches the customers on-time. The delivery staff is either managed by the admin or the restaurant.
Following are the roles of the delivery staff.
Registration: Delivery agents register on the food delivery platform by creating their accounts on the website or mobile app.
Order Assignment: Once an order is accepted by the restaurant, it is broadcasted to the delivery agents near the restaurant location via the delivery staff app. The delivery agent accepts or rejects the order as per their availability. When an order is assigned to the delivery personnel, they receive a notification on the delivery staff app.
Order Management: Delivery agents can use the dedicated delivery app to manage and check their order requests efficiently. They can streamline multiple orders and handle them effectively.
Route Optimization and GPS Tracking: Delivery agents use route optimization features and GPS tracking to work more efficiently, ensuring timely deliveries by determining the most efficient routes.
Order Completion: Once the order is successfully delivered, delivery personnel receive their part of the commission in their wallet.
Once you strategize the business model of your food delivery marketplace, you must look out for possible revenue streams for your business. Incorporating efficient revenue channels into your food delivery system will help you grow along with the other stakeholders involved, in turn building a successful site like Just Eat.
The revenue model of the most popular food delivery marketplaces like Just Eat and Delivery Hero consists of four major revenue-generating channels – Commission, Ad Campaigns, Promotions, Subscription Plans.
Building a food delivery app like Just Eat or Delivery Hero can be a cumbersome task to begin with. However, with a clear roadmap, you can successfully build and launch your own food delivery app/platform. In this section, we share a step-by-step guide to build your online food delivery platform.
The first step to create an online food delivery platform is to thoroughly research the industry, target audience, potential customers’ pain points, and more. You can also create a persona of your target audience, using demographic criteria such as gender, food preferences, nationality, age, and more, and better understand their requirements.
Moreover, analyze your competitors in the industry. Gain information about their strengths, learn from their failures, and implement these learnings in your own business.
After conducting market research and thoroughly analyzing your competitors, the next step is to choose a food delivery model that can meet your business goals. There are majorly two types of food delivery business models:
Order-Only Business Model
In this business model, your online food delivery platform will act as a bridge between restaurants and customers. The customers place orders from the list of restaurants mentioned on the platform. The restaurants are responsible for delivering the food to the customers. The platform owner cuts a certain percentage of commission on every order completed by the restaurant.
Order and Delivery Model
In this business model, your platform is responsible for managing restaurants, customers, and delivery all at the same time. Unlike the order-only business model, in this business model, the delivery is entirely managed by a third-party service provider or delivery logistics company. The restaurants need not be concerned about delivery management. The platform owner charges a commission from restaurants and a delivery fee from customers.
Your online food delivery platform should have user-centric features to provide an elevated customer experience. Consider industry-specific features for all the user types– the admin, merchants, customers, and delivery staff. Following are the must-have features of a value-creating food delivery platform:
When it comes to building an app like Just Eat and Delivery Hero, choosing the right technology stack is very important. This will build the foundation for the success of your online food delivery business.
Before making a decision you can ask yourself the following questions:
You should pick a solution backed by a technology stack that caters to your business needs. Although as a business owner, you don’t need to know too much about the back support of the solution, you must, however, be aware that the base on which your platform is developed, harbours future customizations and allows the scale to business operations and features.
When it comes to starting an online food ordering and delivery marketplace, one must choose a feasible development approach in order to excel in the market. Building a food delivery website from scratch will require hiring a team of developers and investing a good amount of time in strategizing the website infrastructure. Not only will this be excessively time-consuming but also cost-inefficient.
Opting for a turnkey, ready-to-market food delivery solution can help you overcome the above-mentioned challenges. The solution enables you to launch your food delivery marketplace in no time, helping you accelerate the time-to-value.
A value-based food delivery solution will offer you:
Selecting an online food delivery solution that meets your business requirements and helps you launch an ideal food delivery marketplace is of utmost importance.
“We can say that the success of any food delivery platform is based on its ability to deliver 3Cs to the customers: Choice, Convenience, and Comfort.”
We are discussing a few points that you must pay attention to while choosing your food ordering and delivery software.
Opting for a white-label multi-restaurant food delivery software could be an ideal choice if you want to launch your online food delivery business quickly. A white-label software can easily be customized as per your business needs and goals. Moreover, it saves time and is cost-efficient as compared to other options available like building your food delivery platform from scratch.
Consider a software that offers lifetime ownership which avoids the hassle of paying monthly recurring fees or any other additional charges. With a lifetime license, you can use the platform as long as you want by paying only once for it. Additionally, you can have more control over the platform and its security.
A software compatible with multilingual functionalities helps you in reaching out to a global audience. With a multilingual food delivery platform, you can ensure your customers can access and communicate on your platform in their preferred language.
An intuitive and user-friendly dashboard enables business owners to keep an eye on the details related to their business. There are a lot of things that an admin can manage if you have an advanced dashboard. The list includes:
Therefore, it is recommended to choose software that provides an operational dashboard to smoothly manage all your business operations.
Customization capabilities are important to tailor the platform according to your business requirements and goals. Ensure the software solution you are considering offer full customizations to suit your unique needs.
The ability to integrate with third-party APIs enhances the platform’s functionalities and provides a competitive edge among your competitors. Look for a software solution that comes pre-integrated with essential APIs including:
User-friendly and intuitive mobile apps play a crucial role in the success of a food delivery business. Feature-rich apps are important for providing a seamless user experience. Building your mobile apps from scratch would be a cumbersome task and requires technical expertise. However, opting for ready-made mobile apps is a cost-effective and quick option.
Therefore, it is always recommended to look for a software solution that offers user-friendly and feature rich ready-made mobile apps.
After launching your online food delivery business, there may arise a situation where you need to fix some bugs or errors in the platform or may require a technical assistance. So, make sure the food delivery software you opt for provides quick technical support. Moreover, considering a software company that offers free customer support would be an added bonus.
Client testimonials and reviews serve as a form of social proof. They provide evidence that others had a positive experience with the software solution you are opting for. Exploring client testimonials and reviews also provides insights into the platform’s reliability and performance.
A personalized demo by an expert can help you better understand the features and functionalities of the software. This firsthand experience can help you in assessing whether the software solution aligns with your business requirements and goals. Demo with an expert also helps in resolving your queries related to the software and assists you in making an informed decision. Therefore, it is always recommended to consider software company that offers personalized demo.
Consider the software company’s experience and market presence. A company with a proven track record and reputable market presence is more likely to offer a reliable software solution. By carefully evaluating these aspects, you can make an informed decision and select a software solution that best meets your business needs.
Performance and scalability are the important aspects that will determine the success of your food delivery platform. High-performing software will ensure your platform is processing data and performing tasks efficiently and quickly, ultimately, enhancing the experience on your food delivery platform.
Furthermore, it is also very important to choose software that can adapt to your growing business requirements. It should be scalable and must handle the rising number of users on your platform effectively.
Ensuring that the personal details and payment information transmitted between customers, restaurants and delivery personnel is secure and safe is paramount for a food delivery business. You must ensure that the software solution you are choosing is built with a multi-layered security architecture. Moreover, if it adheres to regulatory frameworks such as GDPR, then that ensures legal compliance, avoiding any violation of regulations.
By considering the above mentioned information, you can select a multi-restaurant food delivery software that best fits your business needs.
Changing customer preferences and rising demand for convenience have been the driving force for the evolution of the online food delivery industry. Businesses need to make strategic shifts pivoted around technology and innovation to pursue opportunities extended by the emerging online food delivery market.
Entrepreneurs who want to set up an online food delivery marketplace or build a site like Just Eat must have in-depth knowledge of the changing market trends. The online food delivery solution you choose for launching your marketplace should be designed with a user-centric approach and help you deliver a comprehensive mobile commerce experience. It is highly advisable to have a technology-driven approach while discussing the requirements of your food delivery solution with the partner company to build a progressive and futuristic marketplace.
By leveraging the power of data, technologies, and design, you can drive an everlasting growth for your food delivery marketplace and scale your business.
We create future-focused content to help you stay updated. Follow us on Twitter to get notified about latest tips, trends and product updates.
Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.
Nishat Sania is a passionate writer, tech blogger and content marketer. Having a bachelor’s degree in electronics & communication engineering, she loves to write about the evolving digital industry, changing market trends, and technologies that drive the market. Apart from writing, she spends most of her time reading novels. She is a writer by day and a reader by night.
