As you might know, there has been a gradual shift with the world taking a keen interest to build online grocery delivery businesses like Deliveroo and Swiggy. If you are also looking to make the most of this lucrative opportunity, this blog offers you all the necessary information that goes into the cost to build an online grocery delivery app.

But before we dive into the costings, what’s the reason for this global interest in the online grocery business?

Well, the online grocery delivery business has seen unprecedented success over the last 2-3 years. As per a survey, online delivery services are projected to increase by USD 800 billion from 2020 to 2025. What’s more promising is that it’s increasing at a Compound Annual Growth Rate of 25.25%. With these statistics being no secret to the world, everyone business entrepreneur wants to make the most of this golden-business opportunity.

Now, when it comes to app development costs, there are many factors that lead to the final price. And so, Code Brew also offers a detailed view of how an online grocery delivery business works and the various cost factors associated with it.

Why entrepreneurs are betting heavily on the grocery business?

Covid-19 made people pursue a different shopping method than the traditional ones. In a survey conducted by AlixPartners in 2021, 48% of consumers admitted that their shopping habits have been changed permanently. Today, more people are inclined towards shopping online instead of visiting a local store for a contactless experience.  And it’s not only about the online grocery industry, the same pattern was seen in e-commerce businesses as well.

In addition, the daily lifestyle of working-class people is also responsible for the change. As per a source, the long working hours rarely leave people with any time to do their daily chores. Thus, online shopping is becoming a natural alternative for them.

This phenomenon of more people inclining towards online shopping for all their needs is creating a business opportunity. Hence, a huge influx of business entrepreneurs coming up with innovative ideas to serve people efficiently on their grocery orders.

3 Types of Grocery Delivery Business Model

Before starting a grocery delivery business, you must know the three basic types of grocery business models. This is where the revenue comes from.

Multi-Store

Some of the thriving names in the industry like Zomato and UberEats are using this multi-store business model. In this model, as a business owner, you are the middleman that provides a website/application, interface, and necessary tools for efficient communication between a customer and the vendor.

This is how the process goes.

Here’s how you make money from this model.

• Commission collected at each order
• Commission collected from each subscription for listing
• On-site promotions by the vendor
• Commission collected from the delivery charges

Inventory

When it comes to managing the whole process of ordering and delivering an order efficiently, an inventory-based model works great. Instead of relying on the vendors to ensure the quality of grocery delivered to the customer, all the grocery item is stored in grocery the inventory. Once, the local staff checks the quality, only then it is delivered to the customer using an in-house and third-party delivery agent.

Here’s how you make a commission in this model.

• On Customer’s orders
• Discount procured at wholesale buying of groceries
• Third-party delivery agents

Shopping Model  

In the shopping model, the service provider controls the entire process of grocery delivery. When a customer places a grocery order, the service provider picks up the vendor at random. After which, an in-house delivery agent delivers the order to the customer.

Here’s how you make revenue out of this business model.

• On customer’s orders
• Commission earned from each order from the vendor
• Vendor subscription fees

Key Functionalities to include in an online grocery application

A well-organized grocery application consists of three key functions – user panel, admin panel, and delivery panel. Each of these attributes is essential for a systematic operation between different elements of the process – a customer, service providers, and delivery staff.

User Panel

A user panel must consist of all the customer-centric elements. Here are some go-to functions to include in your user panel.

• User Profile and Registration: This is the basic function that involves customers logging in or sign-up to their account using phone number, email, or other preferences.
• Customer Feedback: A user wanting to place an order for the first time is more likely to trust your services if he sees some relevant customer feedback on your platform. It’s also a blessing in disguise considering that you will have to up your game so that you don’t get bad reviews.
• Order Tracking: A customer likes to know where the order has reached. A real-time tracking system provides all the order-related updates.
• Search Bar: Instead of searching for any product under a specific category, a customer likes to search for the product directly.
• Order Management: This feature allows a customer to manage their orders on the go. Whether they like to cancel the order, change the address, or schedule it for a later date, they should be able to do it without a fuss.
• Payment Options: You must offer multiple payment methods for customer convenience. Try to come up with new payment options like ‘Buy Now Pay Later,’ along with the conventional options like Cash on Delivery, Debit Card, Credit Card, and UPI payments among many more.

Admin Panel

An admin panel is a function used by the people responsible for the smooth management of the customer order.

• Dashboard: A dashboard is a must-have tool to track and manage customers’ orders. It also helps to check the user experience on the application and offers valuable data to improve overall services.
• Order Allocation: This feature allows easy allocation of new grocery orders to various stores and also monitors the swift order execution.
• Payment Management: The feature helps in hassle-free acceptance and management of different payment methods.
• Assign Managers: Different managers are assigned to specific tasks and operations for the smooth execution of the on-demand delivery business.
• Inventory Management: It also allows for the management of the inventory that helps in managing customers’ orders efficiently.
• Customer Management: This feature allows grocery shop owners to easily manage customers’ orders on the go.

Delivery Panel

Here is a list of grocery app functions you must have in your grocery delivery application.

• Geo-Location Services: You can access the real-time location of the delivery agent by integrating GPS in your application.
• Accept/Reject Delivery Request: This allows for the easy acknowledgment of quick acceptance and rejection of a customer’s order.  
• Delivery Request Notification: It sends a notification to the store manager of all the orders that have been placed on the application, with all the necessary detail.
• In-app calling/In-app chat: A delivery agent can efficiently communicate with the store manager and customer for any changes made in the order delivery.
• Delivery Confirmation: Once the order is delivered to the customer, the delivery agent gets a notification of its confirmation.

Feature-Based Cost to Build an Online Grocery App

The variety of features you chose to have in your grocery delivery application accounts for the total costs of the app development. Here are the three versions of the feature-based costings.

Platform-Based Cost Estimation

The cost to build a grocery application further extends to the platform you choose to serve your customers on. So, where feature-based cost estimation helps you to determine the aesthetics of the application, platform-based costing helps to set a budget plan. Here’s how the cost varies for a complex feature version on different platforms.

Final Thoughts

The complete cost to build an online grocery delivery app stands at around $70,000. However, that’s a complete package for top-notch services. If your requirement for a grocery delivery app is minimal, you may not need different features.

But here’s the thing. The current trend and the projected growth in the online grocery ordering industry in the next five years are massive. With so much potential, there will be an influx of more grocery delivery startups competing for the same opportunity, altogether. In such a competitive environment, you can only be able to gain revenue if you offer somewhat better services than your competitors.

Now, considering several factors are shaping the dynamics of your online grocery business, it might become a stressful task. Well, why not outsource the app development to experts?

Speaking of experts, Code Brew offers all the essential features and functionalities at a convenient price. Our team of experienced individuals has a record of developing thousands of mobile applications for various on-demand services.

Contact us today to get a demo! And we will discuss the successful beginning of your online grocery business.