Universal App Research

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Universal App Research

The research provides an investment opportunity analysis of universal restaurant ordering and payment apps, in other words, restaurant marketplace apps or Websites that facilitate ordering and payment activities. Delivery services are perceived to be the value-add to restaurant marketplace apps, which is expected to add incremental sales growth to restaurants. The key differentiators between third-party food delivery service portals and restaurant marketplace apps are no-to-low commissions/fees to restaurants, the direct relationship between restaurants and customers, and real-time loyalty programs based on customer behavior data. Whether the universal restaurant ordering and payment app/Website is used for on-premise or off-premise transactions, both of them are expected to attract more potential customers who currently use third-party delivery apps by providing customers with the experience of restaurant-specific apps.

Usage Overview of On-Premise Food Ordering Apps, Food Delivery Apps, or Apps in General

  • 2.7 billion smartphone users globally spend 90% of the time using smartphones on apps. "The average smartphone owner uses 30 apps per month and 9 apps per day," which leads to changed consumer lifestyle and turns the occasional use of apps into a daily habit.
  • In 2019, the average adult in the US had 2 food delivery apps on their smartphones and used them 3 times per month. In Canada, 29% of the population has used a food ordering and delivery app at least once in their life, which is expected to increase in the future.
  • In comparison, the average number of restaurant apps was 3 in 2016, which increased to between 3 and 4 in 2019 and one of these apps is likely to be third-party platforms, such as Uber Eats and DoorDash.
  • 52% of diners in the US trust restaurant's apps or Websites more than third-party food portals, such as GrubHub and Uber Eats, while 70% of consumers have the preference to order directly from restaurants than third-party service providers. This is likely because third-party platforms withhold customer data and interfere with the relationship between restaurants and customers, as stated by 43% of restaurant professionals. This could be the reason why the average number of restaurant apps on smartphones is higher than the number of food delivery apps.
  • The number of users of food delivery apps, incorporating browsing, ordering and payment functions, is expected to increase from 36.4 million in 2019 to 53.9 million in 2024. The increasing growth trend in the US is expected to be moderately disrupted in 2021 when people return to dine in restaurants. This could be an opportunity for on-premise ordering and payment apps and services, such as OneDine and Revi, to gain traction, as only 25% of consumers are expected to spend more on off-premise orders.
  • 1/3 of customers in the US spend more than $50 per order when they use food delivery service apps. The market for food ordering via mobile apps is expected to reach $38 billion in 2020.
  • Millennial consumers are the group of smartphone users who spend the most time on mobile phones and dine out most frequently. The average millennial smartphone user eats out 5 times per week, which is especially true for those who do not have children. When ordering from restaurants, 42% of the time they choose to dine in and 40% of the time for takeout in 2017 (only approximately 18% of the time for delivery). As mobile ordering and payment apps provide customization and the convenience of multiple payment methods for regular restaurant-goers, these on-premise apps have the potential to retain dine-in or takeaway customers.
  • 74% of consumers believe that restaurants should offer delivery services in the future, as the majority of restaurant operators believe delivery services generate incremental sales and do not cannibalize dine-in and takeout businesses. The addition of delivery services to ordering and payment solutions is expected to be a value-add, which is accelerated by COVID-19.

Average Churn Rates of Downloaded Apps Associated with Food Ordering or Delivery

  • 83% of first-time users of food delivery apps stop using them after two weeks and approximately 88% of these users stop using the apps after one week (a churn rate); 54% of these new users uninstall the apps after one month. The key to increasing user retention rate is to provide a differentiated experience at each stage of the user life cycle by offering incentives for repeat transactions.
  • In 90 days, only 48% of customers of multi-restaurant delivery Websites or apps use the service once or twice in 2017.
  • Once customers sign up for a food delivery platform, 77% of them never or rarely leaves the platform in 2015.
  • In 2019, the general retention rate of mobile apps was 32%, meaning users reused the app 11 times or more, which declined from 38% in 2018. The abandon rate of apps was 25% in 2019, meaning users have deleted the app after using it once. In 2018, the average three-month app user churn rate was 71% (retention rate was 29%).
  • Research from consumers aged 18 years and beyond in the US reveals that the younger the people are, the more likely and frequently they will use multi-restaurant delivery Websites or apps. For people in the age group 18-29, 63% of them have used multi-restaurant delivery Websites or apps in the past 90 days, while 51% of people aged between 30 and 44 have done the same. In India, the male tends to order more frequently than female through food apps.
  • In comparison to restaurant-specific apps or Websites, venue-based food ordering apps, such as Grab, has started to expand the partnership with airports in the US. Similar to OneDine and the apps for Food Truckers, this type of on-premise ordering and payment application is expected to gain loyalty from frequent flight-takers.

Key Success Factors or Best Practices for Universal On-premise Food Ordering Apps or Apps in General

  • Marketplace Apps Give Restaurants the Full Control of Their Websites or Apps. As Websites and apps that are customized for specific restaurants are more popular (158%) than third-party portals, such as GrubHub and Uber Eats in the US, third-party apps or on-premise restaurant marketplace apps that allow restaurants to have full control over their Websites and apps are expected to boost the demand from restaurant operators. This is because third-party portals host a vast amount of young consumers and the customer base expands across generations.
  • Reduction or Elimination of Commission Charges on Restaurants. Due to the high commission charges of 15%-30%, there is a trend of moving away from third-party food delivery apps. DoorDash has started to allow restaurants to have their storefronts and charges them no commission for taking orders. ChowNow is one of the technology vendors who develop food ordering, payment and delivery services with no commission charged on restaurants. If more restaurants migrate into a marketplace app, such as ChowNow, it is expected to see lower food prices that benefit both consumers and restaurants. Some good examples of mobile ordering platforms are Restolabs, ChowNow, Olo, Zuppler, and AllSet Technologies, which provide either all-in-one restaurant solutions or solutions that fill the gap between food delivery and table reservation services.
  • Real-time Data Insights Increase Order Size and Customer Loyalty. As restaurant marketplace apps allow merchants to have more control over their customers' data and build a direct relationship, the real-time view of customer behavior allows restaurant operators to deliver real-time consistency every time consumers interact with the brand. A mobile app that allows consumers to access "loyalty rewards, personalized offers and promotions consistently" is crucial to increase order size and customer loyalty. For example, McDonald's has invested in Plexure, a mobile engagement and loyalty solution, to enhance customer engagement and increase order frequency. Personalization, adapting to changing trends, and simple interfaces are the critical factors of meeting the expectation of new customers. This allows restaurants to compete against food delivery apps and the trend of dining at home, as it gives consumers the ability to order, pay and use loyalty points.
  • Real-time Loyalty Programs. Mobile apps could increase customer visits by integrating customer loyalty programs and offering various discounts. For example, Starbucks' reward programs have retained 15 million members. 45% of consumers indicate that mobile ordering or loyalty programs encourage more regular use of online ordering services. Offers that are sent to customers' phones are expected to generate 1.77 more visits per person per week.
  • Optimization of App User Onboarding Processes. As users' churn rate is the highest in the first one to three days after they install an app. If the retention rate improves in the first three days, the retention rate in 30 or 90 days is likely to be higher. It is essential to keep the onboarding process quick, simple, and clear, for example, by allowing users to sign up with their social media accounts; the assurance of error-free apps, such as applications not responding, is also critical to enhancing the onboarding experience. After this first step, there is a series of other tactics of incentivizing users to stick to apps, for example, push notifications and context-specific content, available here.

Reviews of 15 Major Food Delivery Apps

DoorDash

  • Features: With over 300,000 local favorite dining places, DoorDash offers a variety of dishes to customers based on their locations. Both its Website and mobile app have a scoring system, which recommends restaurants or food stores based on food quality or the popularity of restaurants. Its app offers the core features of online food delivery services, such as the real-time tracking of order arrival.
  • Competitive advantages: With most of its presence in the US and Canada, DoorDash offers merchant-focused technology solutions in more than 76 states/provinces and 4,000 cities. As a leader (45% market share) in the US food delivery market, DoorDash offers door-to-door delivery services and connects the consumers to local favourite restaurants and offers. Its design team aims to balance speed with quality and most initiatives have a long-term blueprint.
  • Consumer sentiments/ratings: Apple App Store and Google Play give the mobile app a rating of 4.8 and 4.6 out of 5, which are from approximately 9.8 million and 1.1 million reviews, respectively. In comparison, the rating and the number of reviews on G2 and Reviews.io are relatively lower and less, where the former gives the rating of 4 from 48 reviews and the latter generates the rating of 1.55 from 10,103 reviews.

GrubHub

  • Features: GrubHubs allow customers to search by cuisines, menu items, and restaurant names; search could also be done by filtering customer reviews, coupons, and special deals; orders are processed by 24/7 customer support. Besides these core features, its app offers many other features, such as order now or preorder next meal, reorder of favorite meals, real-time order tracking, and restaurant reviews and rating. There is a premium app, called Grubhub+, which gives users unlimited, free delivery service and exclusive offers for a monthly fee of $9.99.
  • Competitive advantages: GrubHub is founded in 2004, which has accumulated a vast amount of relationships with restaurants. It claims to have the largest selection of restaurants in the US. The platform features 300,000 restaurants, in which GrubHub partners with 245,000 in more than 4,000 cities in the US. The company is present in more than 800 urban communities and partners with over 30,000 restaurants.
  • Consumer sentiments/ratings: Similar to DoorDash, GrubHub receives the rating of 4.7 and 4.2 on Apple App Store and Google Play from approximately 2.6 million reviews and 381,382 reviews, respectively. Scores and the number of reviews are lower and less on G2 and Reviews.io, which have a rating of 4 and 1.3 from 31 reviews and 108 reviews, respectively

Uber Eats

  • Competitive advantages: In July 2020, Uber Eats acquired one major food delivery service provider, Postmates. While the latter remaining active, they together become the second largest food delivery service provider in the US, with a market share of 37%. In early 2018, Uber Eats also acquired Ando, a delivery-only restaurant, which allows the former to offer more varieties of food to customers. By leveraging Uber's presence in 35 countries around the world, Uber Eats operates in more than 1,000 cities. Uber Eats strives to deliver quality food to customers in the shortest time, inheriting the trust of Uber car hiring services.
  • Consumer sentiments/ratings: Uber Eats earns the score of 4.7 and 4.5 from approximately 1.6 million reviews and 3.2 million reviews on the Apple App Store and Google Play, respectively. G2 and Reviews.io give a rating of 4.2 and 1.12 based on only 141 reviews and 1,987 reviews, respectively.

Postmates

  • Features: Postmates offers customers the option to search nearby restaurants and retailers by delivery, takeout and cuisines in more than 4,200 cities throughout the US. Besides food and groceries, it also delivers alcoholic products and participates in charity activities, such as the delivery of food waste to shelters. Moreover, it has the core features of online food delivery services, such as real-time order tracking.
  • Competitive advantages: Postmates offers food, groceries, and kitchen staples, among other delivery services. The unlimited option offers customers free delivery service if the value of the order exceeds $12, which requires a monthly membership fee of $9.99. Postmates has 500,000 fleets and partners with the largest selection of 600,000 merchants in 50 states of the US; some brands are unique on the Postmates marketplace, such as Sugarfish, Sweetfin, and Blaze Pizza. Commission rates vary by restaurants as opposed to charging a standard rate.
  • Consumer sentiments/ratings: Postmates receives a rating of 4.8 and 4.6 on Apple App Store and Google Play from approximately 1.4 million reviews and 140,004 reviews, respectively. The ratings on G2 and Reviews.io are 4.1 and 1 based on 41 reviews and 4 reviews, respectively.

ChowNow

  • Features: ChowNow is a good example of a technology vendor in food ordering, payment and delivery services. For restaurants, key features are Website/app ordering, pickup&delivery, and contactless dine-in, along with various marketing services, loyalty programs, and social media features. For customers, it has all the core features of third-party food delivery services, such as browsing by cuisine, order customization, easy check process, local selection of restaurants, 24/7 customer support, and pickup or delivery (delivery service is only available in some cities). Customers could place orders directly from the Websites of restaurants, as 75% of customers visit Websites before placing orders.
  • Competitive advantages: The pricing plan to restaurants is competitive by charging no commissions for unlimited orders, which has attracted more than 8,000 restaurants since March 2020. The mobile app is customized to specific restaurants, showcasing its logo and food. ChowNow aims to provide restaurants with an easy and quick way of providing food services and maintaining a direct relationship with customers. Due to COVID-19 that has caused the close-down of many restaurants, ChowNow offers a free loyalty program, Loyal Local, to restaurants; it asks members to prepay the membership fees before they could receive the discounts on future orders placed via restaurant apps.
  • Consumer sentiments/ratings: Based on approximately 12,900 reviews and 341 reviews on Apple App Store and Google Play, ChowNow receives the rating of 4.8 and 3.8, respectively. The score on G2 is 4.6 from 53 reviews, while there is no record on Reviews.io. The lack of real-time order tracking appears to be a disadvantage compared to third-party food delivery apps.

Just Eat Takeway.com

  • Features: The portals and features are localized in 22 countries where Just Eat Takeaway.com operates. For example, the Australian site has a Web address of menulog. The platform offers primarily ordering and payment services while occasionally being responsible for order fulfillment, as most delivery services are managed by restaurants.
  • Competitive advantages: In January 2020, two listed companies, Just Eat and Takeaway.com, merged into Just Eat Takeaway.com. In June 2020, Just Eat Takeaway acquired GrubHub that has a 17% share of the US food delivery service market; the transaction has received regulatory approvals in September 2020. Just Eat Takeaway.com now is present in 24 countries globally and offers customers the widest range of restaurants, resulting from its hybrid delivery model.
  • Consumer sentiments/ratings: There are multiple apps for countries where Just Eat and Takeaway operate, whereas there is not an app available yet for the merged organization. For Just Eat, the rating on Apple App Store ranges between 4.5 and 4.8 from between 6 and 871 reviews, with the UK having the most reviews and Spain having the highest rating. On Google Play, the rating ranges between 3.8 and 4.5 from between 2,452 and 271,566, with the UK having both the most reviews and the highest rating. For Takeaway.com, rating and reviews are primarily on Google Play, the company receives the rating between 3.8 and 4.6 from between 131 and 143,577 reviews, with Germany having the most reviews and Bulgaria having the highest rating.

Deliveroo

  • Features: Deliveroo offers a location-based search by menu items, restaurants and cuisines. It offers a collection of delivery-only kitchens in customers' neighborhoods. Orders are delivered mainly by riders. The platform offers the core features of online food delivery services, such as real-time order tracking and the filtering by dietary, delivery time, and reviews, among others. Promotions and country-specific features are available on separate pages, such as Hong Kong, in 12 countries or regions.
  • Competitive advantages: As one of the most popular food delivery app in Europe, Deliveroo offers options that cater to the need of business customers, corporate events, and group orders. The company has achieved year-on-year revenue growth of 650% and helped restaurants increase their revenues by up to 30%. The company aims to offer the best selection of restaurants that cater to the requirements of individual customers and deliver orders in less than 30 minutes. The technology-driven business has deployed predictive and machine learning technologies to optimize order distribution and minimize delivery time. Based on customer demand, Deliveroo’s Editions platform invests in restaurants and helps them expand into areas where customers have a high demand for a certain cuisine.
  • Consumer sentiments/ratings: The rating on Apple App Store and Google is 4.7 and 4.3 from approximately 71,500 reviews and 230,894 reviews, respectively. The rating on G2 and Reviews.io is 4.4 and 1.3 based on 8 reviews and 538 reviews, respectively.

Ele.me

  • Features: Ele.me is a mobile app-based food delivery service in China, which builds on open source technology. The platform focuses primarily on takeout orders and has the core features of food delivery services. It provides tips and recommendations for improving restaurants' performance based on peer performance in the neighborhood.
  • Competitive advantages: In April 2018, Ele.me was acquired by global e-commerce giant Alibaba and has continued to operate as a subsidiary brand. The app has immediate access to the convenient payment methods and e-commerce customer base from Alibaba. Ele.me also caters to the need of business customers, regarding takeout, group orders, and dine-in services. Dine-in services allow employees to pre-order and pay with business accounts and avoid the hassle of reimbursement. The platform partners with 3.5 million active merchants and more than 50,000 high-end restaurant chains in 676 cities, which aims to deliver orders within 30 minutes.
  • Consumer sentiments/ratings: Customer reviews are primarily on the Apple App Store, which gives a rating of 4.9 from approximately 17,900 reviews.

Meituan Dianping

  • Features: Similar to Ele.me, Meituan Dianping is primarily a mobile app-based platform that offers food and grocery takeout/delivery, hotel booking, and movie tickets, among others. The platform offers the core features of online food delivery services, especially its Dianping app.
  • Competitive advantages: In 2019, the company launched Meituan Delivery, a service dedicated to providing efficient and customized services to customers and merchants. Meituan launched its autonomous delivery vehicle, Xiaodai, in 2018, which received an international innovation award from IDG in 2019. The company's delivery platform is built on the Super Brain real-time dispatch system, which aims to complete deliveries in 30 minutes. As the largest service-oriented e-commerce marketplace in China, Meituan partners with 3.6 million merchants and serves 400 million consumers in over 2,800 cities and counties of China.
  • Consumer sentiments/ratings: Meituan received a rating of 4.1 and 2.9 on Apple App Store and Google Play from 922 reviews and 7,484 reviews, respectively. Its Dianping app receives the rating 4.8 and 3.7 on Apple App Store and Google Play from 5,600 reviews and 13,126 reviews, respectively. There are no records on G2 and Reviews.io.

Rappi

  • Features: The platform offers food and grocery delivery services, among others, with localized features in 9 Latin American countries. The platform offers the core features of online food delivery services, such as 24/7 customer support.
  • Competitive advantages: The delivery service provided by Rappi has been mainly on two-wheeled vehicles, which contributes to the low delivery cost of approximately $1. The platforms leverage mobile technology to give customers full visibility and traceability of their orders, which builds trust over time because of its reliable service. As a close competitor to Uber Eats in Latin America, Rappi offers an easy-to-use app suite and deploys experience-driven marketing campaigns based on consumer data.
  • Consumer sentiments/ratings: The rating on Apple App Store and Google Play is 4.7 and 4.6 from approximately 58,300 reviews and 1.3 million reviews, respectively. The rating on G2 and Reviews.io is 4.2 and 2.5 from only 5 and 2 reviews, respectively.

Jumia Food

  • Features: Its Website features promotional offers on the landing page and provides popular options by city, cuisine and vendor. The Jumia Food app has the core features of online food delivery services, such as order tracking.
  • Competitive advantages: The platform offers a consistent, enjoyable experience across mobile and desktop devices. Ordering is simple and easy. It also caters to the need of business customers with the most advanced corporate food delivery. Based in Nigeria, the platform operates in 9 African countries and is part of the Jumia Group, a leading e-commerce platform on the continent.
  • Consumer sentiments/ratings: Jumia Food app receives a rating of 4 and 3.1 on Apple App Store and Google Play from 3,600 reviews and 16,959 reviews, respectively. The rating on Reviews.io is 1 from 1-2 reviews for the apps in Nigeria and Kenya. There is no review record on G2.

Demae-Can

  • Features: Demae-Can is primarily a mobile app-based platform that provides offers based on the GPS locations of smartphone users. The Demae-Can app has the core features of food delivery services.
  • Competitive advantages: Demae-Can strives to provide a convenient infrastructure and offers the delivery service to either Demae-Can affiliate stores or customers. The company has partnered with a large network of restaurants of over 20,000 in Japan. Delivery takes less than 20 minutes and the company has a customer loyalty program, Delivery Nyan Club, which ranks customers by 5 levels from Regular to Gold. Demae-Can boosts the sales of business partners by providing expertise to restaurants and advice to affiliate stores. However, its recent net and operating profit margins were negative, which adds some doubt to the company's competitiveness.
  • Consumer sentiments/ratings: Demae-Can (出前館) earns the rating of 4.6 and 3.3 on Apple App Store and Google Play from 22 reviews and 9,427 reviews, respectively. There are no records on G2 and Reviews.io.

iFood

  • Features: iFood offers innovative technology solutions and the core features of online food delivery services. Data analytics and AI technologies allow the company to have a deep dive into customer experience and retention. In 2020, the platform starts to extend beyond delivery services by offering 236,000 small restaurants with a banking platform free of charge.
  • Competitive advantages: As the market leader in Brazil (86% market share), iFood sees itself as a food technology vendor and partners with more than 236,000 restaurants and serves more than 6 million active customers in over 1,000 cities. The company's growth has been driven by its acquisitive strategies, such as Spoon Rocket, a pre-made meal delivery service provider. Based in Brazil, its strength in food-related technology, such as order management and partner portal, has enabled the company to expand to other countries in Latin America, such as Mexico and Columbia. With a vision of building a long-term relationship with restaurants and couriers, iFood has put in place a loyalty program with couriers; helps small and medium-sized restaurants grow orders by 44% to R$44.6 million in June 2020. iFood also provides R$3 billion in advance to restaurants to aid them with cash flows.
  • Consumer sentiments/ratings: iFood receives a rating of 4.8 on both Apple App Store and Google Play from approximately 45,800 reviews and 3.7 million reviews, respectively. There are no records on both G2 and Reviews.io.
  • In April 2020, iFood merges with Domicilios.com, a Colombian online food delivery startup owned by Delivery Hero, which is a strategic move for expanding in the Columbia market.

Zomato

  • Features: Zomato recommends local options automatically based on the IP addresses or GPS locations of browsers. The recommended options are structured by different areas or districts of the city where consumers live. The platform also allows the search by popular cuisines and restaurants, which also acts as a social network of foodies. The platform has the core features of online food delivery services and the Zomato Pro membership gives customers a discount rate up to between 25% and 40%.
  • Competitive advantages: Based in India, Zomato has expanded to 24 countries and over 10,000 cities globally. The company adopts the approach of enhancing the quality of food through hygiene and works with restaurants to build a sustainable ecosystem. Some key features that are built on Sushi, a new design system, are "one search fits all, fastest way to review now, and all answers under one umbrella." Zomato partners with more than 1.5 million restaurants.
  • Consumer sentiments/ratings: The rating on Apple App Store and Google Play is 4.6 and 4 from approximately 52,700 reviews and 4.5 million reviews, respectively. G2 and Reviews.io present the rating 4.2 and 3.2 from 58 reviews and 10 reviews, respectively. Among 15 companies in this research, Zomato has received the second-highest number of reviews following DoorDash.

Yandex.Eda

  • Competitive advantages: Yandex.Eda is the food delivery service platform developed by Yandex, a technology vendor in search and information services powered by machine learning solutions. The company has faced fierce competition from its close competitor, a joint venture formed by Sberbank and Mail.ru. Yandex.Eda is expected to separate from its parent firm Yandex.
  • Consumer sentiments/ratings: the rating on Apple App Store and Google Play is 3.8 and 4.1 from 815 reviews and 51,853 reviews, respectively. There are no records on G2 and Reviews.io.

Research Strategy

The research reviewed a series of news releases, articles, databases, user review sites, and company Websites in the space of food ordering, payment and delivery solutions and platforms. There is limited information on universal marketplace apps or Websites for food ordering and payment services, as they are mostly part of either restaurant-specific apps or third-party food delivery apps, such as DoorDash and Uber Eats. The selected features of food delivery apps are core features or those that many apps have in common. The customer reviews on mobile apps are focused on the ones used by customers as opposed to restaurants and deliverers, as the former receive more reviews and are the critical reflection of brand performance. As some information on companies is written in Spanish, Japanese, Portuguese, or Russian, such as Rappi, Demae-Can, iFood, and Yandex.Eda, the research team is unable to provide information and statement, such as the core features of food delivery services, but rely on sources that are written in English. As most companies under review are market leaders in their respective countries or regions, the difference among them is expected to be minimal but more about unique strengths, such as technology solution development capabilities, business partnerships, and loyalty programs.

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