Market Size and Big 4
The food delivery apps grow and make it more attractive for time-starved consumers and generations millennial and Z. According to the food delivery market research of Allied Market Research, the market for delivery mobile apps to hit $16.6B in 2023. The food delivery market analysis shows us that it was valued at about $3.7B in 2017. The segment is predicted to grow the fastest at 28% by 2023.
The food delivery services like GrubHub, UberEATS, DoorDash, and Postmates are transforming the way people get their meals. In 2017, Grubhub had nearly $4 billion in gross sales. UberEATS had 8.7 million active mobile app users as of Q1 in 2017, despite being one of the youngest delivery apps.
Why are food & delivery apps growing?
The number of food and delivery apps are increasing in stores. The main drivers of this growth include high internet penetration, a higher standard of living in developing countries and an increase in mobile usage.
The growth causes high competition, which leads to a decrease in the cost of the delivery fee. Users can simply enter their locations, and food & delivery apps will show them the restaurants in their areas, which deliver to their home without ever leaving their place.
The high stand of living causes people are frequently dining in on any food they want, not just pizza, with direct delivery. Notably, in California, the number of people with a healthy life is dramatically increasing, so on-demand food delivery applications make new alternatives for those people.
Whole Foods that Amazon is acquiring, creates a world where people work from home, have their groceries and meals delivered in 2 hours with Amazon Fresh right to their front doors so that the customers can sit and eat in front of the TV watching Netflix.
Successful Food & Delivery Business Models
There are several ways in which app owners can manage the on-demand restaurant app monetization. Generally, the ones that are most commonly applied the businesses are the apps are free to use, but restaurants may charge a delivery fee and have a minimum order amount. Most restaurants don’t have their own delivery team. For instance, food & delivery apps like GrubHub takes care of it, but at a cost. The customer pays a delivery fee which is 10% cut per order, bringing the total rev-share to 23.5% on average.
The subscription model is getting more popular among food & delivery apps. The customer agrees to pay a monthly fee to enjoy the free delivery or no small order delivery fee. On-demand restaurant apps have started to join the most popular service model which is the subscription plan and a food pickup option for faster takeout. DoorDash just launched a monthly subscription; the cost is $9.99 DashPass service, which gives consumers free deliveries on all orders of $15 or more.
Advertising is a critical part of generating a high amount of revenue. By giving restaurants a place in the app like a banner or for running a full-screen video for them in the main page or screen increase the revenue for the application. UberEats help its partners acquire more customers by offering brand campaigns, social posts, and video marketing to Uber’s rider base.
Mobile Advertising Stats: What is the avg. cost per user?
There are several models for mobile app marketers to decide launching an app’s advertising campaign. CPI (Cost Per Install) is one, which means you pay when someone installs and open the app rather than the advert just being viewed (known as the CPM, or cost-per-mille, model).
Another popular method is CPA (Cost Per Acquisition). Advertisers only pay when the user completes the specific action in the App Flow like registration or subscription and so on.
The average app install for food & delivery category is $4.08 and the cost per registration is $8.22 and the cost of a subscription is $148.01.
(However, with the right publisher optimization (placement), it is possible to decrease the cost of acquisition for per user. On the App Samurai dashboard, the average cost of install is $2.25 for IOS and $3.00 for Android for on-demand restaurant apps.)Let’s schedule a demo and talk about your app marketing strategy to boost your app to the next level.
To be in Top 10
Ordering home becomes the center of our lives, particularly if you belong to the millennial and Z generations. So, it shows the food delivery market continues to grow in different markets which means the food app market is getting more competitive.
To be in the top 10 in the App Store or Google Play store depends on boosting brand visibility, and continuing to acquire new users who will be engaged with the app. One of the most critical things for the growth is to acquire the right users and it is possible to optimize the campaigns according to your KPIs with the right pricing model!
Recipe for reaching the Top Charts
- Competitor analysis: Benchmarking your app can help you to understand your competitor performance. There are some questions to answer first to get a better analysis; How many downloads and active users are a realistic goal for the mobile app? How many downloads does it take to be a top app in my category? Is there more room for your app to grow? There are also some metrics, which are required to answer those questions; the number of downloads, Daily Active User (DAU), Monthly Active User (MAU) and Average Days Used Per Month.
- Estimated number of installs you need to get: The estimated number of installs are calculated using the average number of daily downloads in the top 10 food and delivery apps. Boost campaign (Rewarded install campaign) will help to increase the number of downloads and ranking in the store. There some steps the follow to be in the top 10. Following the daily based on app performance in rankings is the first step. After the weekly performance, Account manager or app owner has a better sight on the strategy for the following weeks to target higher rankings. After the first week, it is important to keep the campaigns running for the rest of the month to keep the current ranking and/or elevate it to higher rankings.
- ASO, Reviews and bug fixes: There are many metrics to assess the quality and the popularity of an app. These metrics are review score, category ranking, number of keywords that the app ranks in the top 10. App Samurai algorithm gives an overall score to an app by looking at the above metrics. The algorithm behind this is secret but for app marketers, it gives an idea if any attempt is making the app more visible or not. For apps with a score does not mean there is nothing to do more, but it basically says; it is distinguished from others in many metrics.
Food delivery market analysis of food delivery market researchs show us how a shining future food delivery apps have. But It will be difficult to be found in the ocean of millions of other applications.
Some insights help you to determine the next UA strategy and increase your iOS and Android performance, and we’re willing to support you in every step.
– Review hack to increase your rating store
– ASO studies to increase ranking in search
– Boost campaign to increase your store ranking