A Step by Step Guide to Start a Food Delivery Business in India

Every day, millions of Indians are ordering food online, creating a huge demand that’s waiting to be met.

Especially during a super hyped cricket match – all they need is food in front of them and their eyes glued to the sports channel. 

Entrepreneurs who want to start their online food delivery business – don’t you think there’s no better place and opportunity than this to tap into the growing market? 

If the business complexity and competition are holding you back – now it’s time to step out of that shadow. 

In this blog, I will share a step-by-step guide to starting a food delivery business in India and capitalizing on this growing trend.

What is An Online Food Delivery Business?

An online food delivery business delivers food from restaurants to customers’ doorsteps through a website or app.

Technology acts as an intermediary between customers and restaurants. Customers can browse menus, place orders, and pay online. The restaurant prepares the food, and a delivery driver brings it to the customer’s door. It’s convenient for customers and offers restaurants a new way to reach more people.

Why Start a Food Delivery Business in India?

Let’s talk about numbers first. The online food delivery market in India is expected to reach US$92.50 billion by 2029. That’s a massive pie, and there’s plenty of room for new players to grab a slice. 

Now it’s time to have a look at the factors that make it hard to sit back on the couch instead of starting a promising food delivery business in India. 

Market Potential

India’s diverse population and growing internet penetration create a massive potential customer base for online food delivery businesses. Also, families with working parents and youth having access to the Internet has contributed to the demand for food delivery apps in India. Urbanization is on the rise, and people are busier than ever. These factors create a huge demand for convenient food delivery services.

Consumer Behavior

Indians love their food, and they love convenience even more. Studies show that customers prefer ordering food online rather than cooking at home, especially during dinner time. Also, it was visible that people are more inclined towards fast food and north Indian cuisine. These consumers are tech-savvy brand-conscious and value convenience above all else. This presents a golden opportunity for food delivery apps in India to deliver a seamless and user-friendly online food ordering experience.

Success Stories

Many startups in India have become very popular by entering this market. Companies like Swiggy and Zomato have changed how Indians order food. Their success shows that with the right plan and execution, new businesses can thrive in this industry.

Food Delivery Business Revenue Model

Now let’s talk about the most important part of any business – revenue. There are a couple of main ways you can earn as an admin or business owner: 

Commission on Orders: In this system, as a food delivery business owner you will be able to charge restaurants a commission on each order placed through the app or website. 

Delivery Fees: Customers might also be charged a delivery fee on top of their order total. This fee can be fixed or vary based on factors like distance and order size. 

Advertising: Restaurants can pay to be featured prominently on the app. This is a great way to earn extra revenue as a business owner. 

Subscriptions: Subscriptions offer a steady income for businesses. This model ensures predictable revenue and helps in planning expenses. It also builds customer loyalty, as subscribers are more likely to stick with your service.

Image: Different Revenue Models of Food Delivery Business

Steps to Start Your Online Food Delivery Business in India

The online food delivery market is hungry and needs entrepreneurs like you to take it to the next level. But for that, you need careful planning and put your best foot forward to make it a success. 

Here’s a step-by-step guide to help you with that – 

1. Market Research and Planning 

It all starts with understanding your target audience. Ask yourself questions like – 

• Who are you trying to serve?
• What are their needs and preferences? 

Once you have written those down, try to research top food delivery business ideas. It will clear your idea more about the industry and expand your potential. Also, make sure to do competitor research. This way you will be able to understand any existing market gap and work on resolving that. 

2. Choose a Business Model 

First, decide whether you want to partner with existing restaurants ( multi vendor food delivery system) or set up your own kitchen (single vendor food delivery system). Partnering with restaurants can be quicker and less costly. On the other hand, creating your own kitchen gives you complete control over the food quality and menu. 

Next, consider the type of delivery service you want to provide. There are options like on demand delivery and scheduled deliveries. Each decision you make in this step will shape how you structure your operations and market your business. 

3. Create a Business Plan

For this step, start by outlining our business goals, such as your target market and what you hope to achieve in the first year. Then define the strategies you’re going to use to achieve these goals. 

You also have to have a section called ‘Financial Projection’. Here you will estimate startup cost for food delivery business like expected revenue, and profits. 

Next, plan your budget carefully. Calculate startup costs, such as technology, marketing, kitchen setup ( if a single vendor model is chosen), and initial staff hires. Don’t forget ongoing expenses like delivery logistics, salaries, utilities, and marketing. This budgeting helps you understand how much capital you need and manage your finances effectively. 

4. Register Your Business

This is a crucial part. First decide on your business structure, whether it’s a Private Limited Company, Public Limited Company, One Person Company, LLP, Partnership Firm, or Sole Proprietorship. If your business exceeds the GST threshold limit, you will have to register for this license. 

Next, apply for a Health Trade License to ensure your food is prepared hygienically and safely. The FSSAI License is a must for every food establishment across India. Make sure to get a Signage License, Trademark Registration, and Shop and Establishment Certification to promote and protect your business. It usually takes around 25-30 working days to complete the process.

5. Build Your Online Platform

Building your online platform is a crucial step in starting your food delivery business. This platform will manage your operations efficiently. You can choose from these two popular options: building from scratch or using a ready-made solution.

Custom development demands a substantial commitment of time and money. The end result of software or performance is highly influenced by the skill of your developer or development team and can either produce a high-quality platform or a buggy one.

On the other hand, a ready-made food delivery software solution allows you to launch your business with less investment and time. These solutions are designed with market and business needs in mind. So you can save a lot of time on the market research and analysis phase. Before release, the software undergoes thorough testing to ensure it’s bug-free and ready for immediate use. This approach minimizes the risk of encountering issues. It allows for a smooth and efficient start to your business.

6. Partner with Restaurants

If you plan to do a multi vendor online food delivery service in India, then this step is required, otherwise, skip reading to the next one. 

You can start by approaching local eateries and showing them the benefits of joining a platform like yours. Have a partnership agreement signed before onboarding to be transparent and avoid potential business risks. Make sure to highlight the mutual benefits and the ease of joining your platform. This partnership model helps in scaling your business quickly and effectively.

7. Set Up Delivery Logistics

If you plan to build a single vendor food delivery business then it’s a must. Also, many multivendor service providers deliver through their own deliveryman or sign up with a third-party delivery service provider rather than depending on the partner restaurants on the platform. 

Your goal is to ensure food reaches customers quickly and efficiently. You can achieve this with timely delivery. For this, you can regularly train your team on best practices. 

8. Marketing and Promotion

Marketing and promotion are essential to attract customers to your food delivery business. Think about how top food delivery companies in India like Zomato or similar services have established their brand on the market. Even if someone sees their logo anywhere they immediately know what brand it is. 

To be on that level in the market, start by taking advantage of social media platforms. As Facebook, Instagram, and YouTube are the most used platforms in India, try to target your audience from here. Create engaging posts and ads to showcase your offerings. Online ads can target specific demographics and ensure your promotions reach the right people.

You can also offer introductory discounts and other promotional offers like referral points, loyalty points, free delivery, etc. Consistent and strategic marketing efforts will help build your customer base and increase brand visibility.

9. Launch and Monitor 

Now it’s finally time to launch and start doing your dream business. In this step, also take advantage of social media and announce the launch. 

Once your platform is live, keep a close eye on its performance. Track key metrics like order volume, delivery times, and customer satisfaction. Encourage customers to leave feedback on their experience. This will help new customers find authenticity in your business. Also, these feedbacks help you identify any areas of improvement and level up your business. Regularly monitoring and responding to performance data and customer feedback will help you refine your operations and ensure long-term success.

Final Words 

The online food delivery business in India is a sizzling opportunity with a hungry market waiting to be served. By following the steps outlined in this guide, you can build a successful business that meets the needs of hungry customers across the country. 

I hope this blog helps. Good luck with your food delivery in India.

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