Online Food delivery Business Model Explained


Everyone needs food, but not everyone likes shopping. In a society where time is of the essence, many people are happy to pay to have their groceries delivered by someone else. You should market research, advertise and research local business licensing requirements just like you would when starting a business. However, if you have a reliable vehicle and the time to drive, the service can be profitable.


Consumers are quick to buy food online. According to Orian Research, the global online supermarket market is expected to grow at a CAGR of 23.7 percent between 2020 and 2025. According to another study, the food e-commerce market is expected to grow to $250 billion in the next five years.

This estimate will undoubtedly spark the curiosity of many entrepreneurs in the food eCommerce market. This blog aims to give such entrepreneurs a thorough understanding of how an online food marketplace works, as well as numerous revenue channels, crucial features and helpful ideas and growth hacks to help them get ahead of the competition.

Things to consider before starting an online supermarket


You should focus on the following elements to be successful in starting and managing an online supermarket business:

  • Choosing and improving (if necessary) a supermarket business model
  • We create a roadmap for transforming the business model in a flexible, efficient and accurate model.
  • Identify your target market Identify
  • the delivery zones
  • Analyze your competitors
  • Website and smartphone apps for groceries

Entrepreneurs or business owners often waste a lot of time and resources determining the best business model for supermarkets based on all these aspects.

We’ve outlined four primary business models in the food industry, along with examples of market players, to help you.

A Few Key Figures on the Food Delivery Business Model


At least twice a week, 60 percent of US consumers order food online.

Millennials want food delivered to their homes so they can watch movies and TV shows at their leisure.

In the aftermath of the COVID 19 crisis, the food delivery app is expected to grow at a 5% CAGR to $154.3 billion by 2023.

60 percent of restaurants agree that taking orders online and having them delivered has resulted in increased sales.

The annual average has risen by 20% as a result of delivery sales.


In view of the Corona recession, here is a percentage graph displaying the number of people who intend to expand their food delivery services.

What is the procedure for using an online food ordering platform?


Marketplace Owner/Admin, Merchant, Customer, and Delivery Management are the four types of stakeholders involved in the operation of an online food ordering marketplace. The following is a breakdown of how an online food ordering marketplace works:


  • The platform’s administrator forms partnerships with merchants from all over the world and adds a number of restaurants.
  • Merchants include, among other things, the name of the restaurant, menu items, operating hours, working days, and packaging information.
  • Customers can use their email address or a social media account to sign up for the platform.
  • After completing the registration process, customers use an advanced search tool provided on the platform to locate their favourite restaurants and select food items.
  • Customers confirm their orders by paying for them using their preferred method of payment.
  • Merchants accept the order and begin preparing the food based on the customers’ suggestions.
  • When delivery boys receive order requests, they go to the merchant’s location to pick up the order.


Customers can track the status of their orders as well as the delivery team’s location in real time.

The delivery team picks up the food when it’s ready and delivers it to the customers. Order delivery is handled by either the platform/app owner or the merchant.

The marketplace owner receives a portion of the commission from each order placed through the platform, with the remainder going to the merchant’s account.

Summing Up

You can select one of these three food delivery business models depending on your demands. Each of the three food delivery service business models has its own set of advantages and disadvantages. Make extensive research into your business and select the option that best suits your food delivery startup.

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