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.
- Substitution of dining in a restaurant.
- 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.