Blog Summary:

This blog is an extensive guide to developing a grocery app for startup owners and food-selling businesses. It will shed light on the key business models, basic and advanced features, ideal tech stack, and app development cost. The blog also provides bonus insights on the top 5 grocery delivery apps and how to overcome challenges on the way to becoming a top grocery business leader.

For a long time, grocery shopping involved navigating crowded aisles of markets, long checkouts, and even forgetting a few items. However, technology has made picking up household items a convenient shopping experience with sophisticated algorithms and networks with local stores.

In the USA, the online grocery market reached USD 59.5 billion in 2023 and is expected to reach a massive USD 2.159 billion by 2030. For many small and big grocery business owners, grocery delivery app development can transform real-world problems.

In this blog, we will help them see these challenges as opportunities to revolutionize this mundane routine into a seamless online shopping experience.

Business Models of Grocery Delivery Apps

The on-demand delivery app business model provides customers with easy access to shop for products from anywhere. This profitable market works on the following business models:

Inventory Model (BigBasket)

In this model, an e-commerce store buys inventory items from different companies and stores them in its warehouses. The store manages the inventory, fulfills customer orders, interacts with customers, and ensures timely delivery.

A noteworthy example of this model is the BigBasket grocery app, the leading online grocery delivery app in 25 Indian cities. It stores its inventory bought in bulk from suppliers like P&G, HUL, and Fresho across 12 warehouses.

The most distinguishing feature of BigBasket is that it sells its inventory instead of serving as a marketplace for suppliers.

Marketplace Model (Instacart)

In the Marketplace model, multiple buyers & sellers ship and pay through a website on a common e-commerce platform. The seller handles packaging and distribution, or the seller packages the item, and the marketplace owner dispatches it.

A great example of this model is the Instacart grocery store app, an intermediary platform that connects customers with local grocery stores.

It works on a three-tiered customer strategy involving retail partners, customers, and shoppers (full-service and in-store). It earns revenue from markup prices, delivery fees, membership fees, service fees, pickup fees, and partner payments.

Hybrid Model

The hybrid business model combines the marketplace and inventory models, enabling businesses to serve a varied customer base. It offers customers an in-store shopping experience with the convenience of online grocery shopping options.

It also combines support from local store vendors with on-demand technology for efficient order fulfillment.

Amazon Fresh is an excellent example of a hybrid grocery shopping app that combines its network of centers. It keeps a stock to manage a vast inventory for reliable deliveries and distributes groceries by partnering with local grocery store owners and vendors to bring unique special items.

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Benefits of Building Grocery Delivery Apps

Building an online grocery delivery app will enable your business to earn profits by taking customer orders and purchasing those items at lower costs from local stores and sellers.

Let’s understand how your business will expand its customer base by attracting customers who prefer a personalized online shopping experience:

Personalized Experience

Grocery apps allow better engagement with customers by keeping them in the loop even after they sign out and place an order. They can schedule orders and even get recommendations for further shopping.

Convenient Deliveries

More than 60% of customers find online grocery delivery services more convenient. Since customers are getting smarter and finding ways to save money, grocery apps offer many discounts, memberships, and cashback options.

Order Tracking and Payments

Real-time order tracking on grocery apps is the most efficient feature where customers can track their orders through a map. Payments also have varied options that allow them to select their preferred payment method.

Let’s have a look at the benefits of grocery apps for grocery stores & restaurants:

Sales Opportunities

Online ordering increases sales opportunities by offering a personalized experience based on customers’ earlier purchases. Online grocery delivery apps can attract even the busiest customers as they can order from anywhere and choose a delivery slot that suits them.

Valuable Customer Insights

With app analytics, a grocery app provides insights and data related to customer preferences, peak purchase times, and demographics. You can categorize customers based on preferred shopping times, best products, and chosen payment methods.

Profitable Inventory Management

Managing inventory becomes easier with a grocery app as you can make faster and more informed decisions regarding unavailable items. By integrating inventory management, you’ll have information at your fingertips about which item needs to be restocked or introducing new items.

Top 5 Global Grocery Delivery Apps

Instacart serves more than 10,00,000 users today. Uber Eats is a top Hotel, Restaurant, and Catering (HoReCa) app that offers a subscription through which customers can order unlimited groceries without any delivery fees.

Similarly, Zepto, Dunzo, BigBasket, and Blinkit have been ruling Indian customers with deliveries under 45 minutes and even 10 minutes.

Instant delivery and the convenience of online store browsing have made these grocery delivery service apps a huge success. Before you start your own business, let’s look at how the top 5 apps in the world today are leveraging top-notch features and generating revenues:

Grocery App Availability Revenue Key Benefits (USP)
Instacart Based in the US, it serves 5,500 cities in the US and Canada 8.04% YoY growth
Annual revenue of $3.04B
Delivery fee ranges from $3.99 to $7.99
A subscription to Instacart+ is $99/month for unlimited deliveries.
Zepto – Based in India, it serves major metros 14 times growth
Rs. 2024 Cr revenue in 2023
10-minute grocery delivery in nearby locations
Zepto Pass at Rs. 299 / month
HelloFresh Based in Berlin, it is the largest meal-kit provider in the US, Canada, Australia, and New Zealand. 7.6 billion Euros in FY 2023
2.8% growth from 2022
Home-cooked meal subscription boxes
between $8.99 and $12.49 per serving
weekly subscriptions
Buymie Based in Dublin, expanding to 200 locations in Ireland and Britain 14.9 million Euro per year Same-day grocery delivery in under 1 hour
Free delivery on orders above 40 Euro
Weezy Based in London, it serves Manchester, Brighton, and Bristol 161,400 Euros 15-minute deliveries
Electric bikes and cycle couriers
Delivery fee of £2.95.

Key Features of Grocery Delivery Apps

An online grocery ordering app typically consists of two main apps: an app that users download to shop and a local delivery app. Both enable making those deliveries and are crucial to ensure deliveries and orders take place.

Customer App

Here’s an approximate estimate of how much each feature would cost for the customer-facing app:

Features Estimated Cost (USD)
User Registration/Login $1,000 – $3,000
User Profile Management $1,000 – $2,500
Product Listing $2,000 – $5,000
Product Details $1,000 – $3,000
Shopping Cart $2,000 – $4,000
Checkout Process $2,000 – $4,000
Payment Integration $3,000 – $5,000
Order Tracking $2,500 – $5,000
Push Notifications $1,000 – $2,500
Customer Support $1,500 – $3,000

Let’s understand the features of the customer app in detail:

User-friendly Interface

A user-friendly UI ensures a quick registration process. It is designed to be easy to navigate, with intuitive controls and a simple design. You can also add social media integration.

Product Browsing and Search

The feature allows users to save time by easily browsing through a wide range of grocery products by category or product name and finding the best deals and discounts on popular items.

Secure Payment Options

This feature enables secure and hassle-free payment options with multiple payment gateway integration, prioritizing data security and privacy by using advanced encryption.

Order Tracking

Customers can track updates on their order status and delivery progress with a real-time tracking system from the warehouse to the doorstep.

Delivery Schedule

Customers can select a convenient delivery slot and schedule their delivery by choosing the best time, whether it’s early in the morning or late at night.

Admin App

Here’s an overview of the features for the admin panel with estimated costs:

Features Estimated Cost (USD)
Admin Panel $4,000 – $8,000
Inventory Management $3,000 – $6,000
Delivery Management $3,000 – $6,000
Reviews and Ratings $1,000 – $2,500
Loyalty Programs $2,000 – $4,000
Multi-language Support $1,500 – $3,500
Analytics and Reporting $2,000 – $5,000
Security Features $2,000 – $5,000

Let’s understand the must-have features for the admin panel in detail:

Inventory Management

Admin can easily manage inventory, track stock levels, monitor sales trends, and automatically restock products to ensure profitable inventory management.

Order Processing

Admin can easily process orders with a user-friendly admin panel that tracks orders in real-time, manages order statuses, and automates delivery notifications.

Delivery Route Optimization

Admin can optimize delivery routes for maximum efficiency and minimum time with a route optimization algorithm that calculates the most efficient delivery routes.

Performance Analytics

This feature allows admins to analyze key performance indicators like sales, inventory, and customer satisfaction, identify trends, and make data-driven decisions.

Customer Communication Tools

Customer management tools ensure that admins can track product information, images, and descriptions to receive accurate in-app reports and provide valuable order insights.

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Challenges of Running a Grocery Delivery App

When thinking of grocery delivery app development, the first question that pops up in the owner’s mind is whether the app will be profitable.

However, you can also run into some challenges when there are unsold products left in the store that you expect to be sold out. Let’s understand these in detail with possible solutions:

Maintaining Product Freshness

An app’s product catalog contains various types of items – non-perishable and perishable products from nearby grocery stores. Moreover, the comprehensive list can be difficult to navigate if you don’t have a proper browse and search system.

Solution: Categorizing items with tags and advanced search filters will help customers navigate through them. AI-powered product search and recommendations will also enable them to find products faster.

Ensuring Timely Deliveries

Timely deliveries are important to ensure that customers get their orders on time. However, sometimes orders get late when delivery personnel aren’t able to deliver on time, leading to customers calling to find out the location.

Solution: Integrating a GPS navigation system with a real-time order tracking feature and an estimated time for delivery and arrival will be helpful for customers.

Managing Logistics and Delivery Costs

Due to the lack of a scalable database, a vast amount of data can lead to mismanaged logistics. This can also lead to non-coordinated deliveries without proper planning and optimization.

Solution: Consider partnering with a custom logistics software development company that can help solve the challenges of managing logistics and multiple deliveries simultaneously.

Changing Consumer Behavior

Businesses cannot control changes in consumer behavior. Ordering from an app is constantly changing with new features, and a small error in the process can lead to dissatisfaction.

Solution: A personalized shopping experience can increase the chances of retaining customers. Offering discounts, loyalty programs, tags, and repeating past orders can also help.

Steps for Grocery Delivery App Development

Let’s understand how Amazon Fresh functions to help you get insights into the intricacies of creating your grocery store app. Amazon Fresh has a hybrid model, which has its fulfillment centers to keep stock consistent by partnering with local stores.

Here are the steps you can follow for developing a grocery delivery app:

Define Target Market and App Functionalities

The first step in launching your app is to understand the current market. Study competitors’ models and products to understand the demand, threats, weaknesses, and strengths.

Then, attempt to answer the following:

  1. Have you found any market gaps?
  2. Which must-have features do you need?
  3. Which user journey should you focus on?
  4. How can you build product awareness?

Based on the answers, you can create user personas and establish a roadmap for further development.

Design a User-friendly Interface

To define your interface, understand how the competitors approach the user experience strategy. Since this is a mobile-first world, your USP should always focus on platform compatibility, easy navigation, more engagement, and security.

At this stage, it’s advisable to partner with an experienced mobile app development company. They can help develop prototypes and define the required features, covering both the visual and user experience.

Choose a Suitable Technology Stack (discussed later)

Once the mockups, style guides, and design specifications are ready, designers can decide on the navigation elements and animations.

To implement the concept, developers write and structure the code for different platforms, ensuring compatibility and optimization. They also define the app architecture to connect these elements with a set of techniques.

Develop and Test the App

This step puts all the planning into action. It starts by creating a Minimum Viable Product (MVP) with the most basic features that can be scaled according to user feedback.

It focuses on the core functionality of a customer app and an admin app. Once the MVP is up and running manual and automated testing ensures that the app functions smoothly in different environments.

Launch and Marketing Strategy

After being in the industry for the last 15 years, the development team at Moon Technolabs understands the importance of having the right app development partner for startups.

The development phase involves business and technical development. In fact, marketing accounts for almost 2/3rd of the total budget, compared to 1/3rd for development.

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Technology Stack for Grocery Delivery Apps

Choosing the technology stack for a grocery delivery app depends on the type of app you want to build. For example, if the app is based on an aggregator app model, you’ll need features to list out stores and seamlessly connect customers to vendors.

Here’s an overview of common technology stacks used for developing a grocery app:

Development Stage Estimated Hours Estimated Cost (USD) Suggested Tech-stack
Front-End Development 200 $10,000 React Native/Flutter, JavaScript
Back-End Development 200 $12,500 Node.js, Python,
Database Design 50 $2,500 MongoDB, Firebase
API and Servers 120 $4,000 AWS, Docker, Halla REST API
Testing 60 $3,000 Jest, Mocha
Deployment 40 $2,000 AWS, Google Play Store, Apple App Store
Maintenance and Updates 60/month $3,000/month GitHub, Jenkins, Docker
Real-time Analytics and Chat 150 $5,000 Datadog, Prometheus, Kafka, WebSockets, Google Matrix API
Third-party Integrations 200 $6,500 Google Maps, MapBox Geocoding API, PayPal, Braintree,

Let’s understand some common technologies used for the most necessary features of grocery apps:

Front-end Development Tools (React Native, Flutter)

React Native uses JavaScript, providing native components for user-friendliness. Flutter brings rich customizable widgets with Dart to provide the convenience of using a single codebase for both Android and iOS platforms.

Back-end Development Languages (Python, Java)

Python, Java, and NodeJS ensure that customers don’t experience lag when adding products to their carts. For the same reason, they are called event-driven technologies that eliminate the blocking of simultaneous processes.

Database Management Systems (MySQL, PostgreSQL)

A database modifies the data sent from the front end to the back end, and it needs maximum security to process requests and send them back to the users. MySQL and PostgreSQL are ideal choices for users of a grocery app to navigate through the database easily.

Third-party Integrations (Google Maps, PayPal)

Location services and payments are two essential third-party integrations to enhance app functionality. Google Maps is an excellent choice for providing accurate location data for stores and deliveries. PayPal is great for secure and convenient payment processes.

Cost of Developing a Grocery Delivery App

The grocery app development cost of a simple MVP will cost around USD 25,000, and a complex MVP can cost up to USD 45,000. To start with the discovery phase, we suggest partnering with an Indian software development team for grocery delivery app development services.

This will allow you to leverage the skills of development experts and analysts. They conduct comprehensive research and build a prototype based on documentation, which is highly useful for estimating your project’s timeline and cost.

The discovery phase would cost around USD 8,000 to USD 10,000 and take three to five months. Once it’s completed, you can build an app with features your customers want, which would cost from USD 50,000 to USD 1,00,000 and can take up to six to eight months.

The cost of developing a grocery delivery app like Instacart, DoorDash, or Amazon Fresh depends on multiple factors:

  1. The development team you choose, their location, experience, and team size.
  2. The technology stack, number of basic and advanced features, and project timeline
  3. Developing the required apps – a customer-facing app, an app for restaurant owners, and an admin panel app.
  4. Third-party integrations like payment gateways, existing systems

Here’s an overview of the app development cost at different stages:

Development Stage Estimated Hours Estimated Costs (USD)
Market Research 80 $4,000
Design and Prototyping 240 $12,000
Front-End Development 200 $10,000
Back-End Development (Database, API, Setups) 450 $24,500
Testing 240 $12,000
Deployment and Launch 80 $4,000
Maintenance and Updates 70/month $3,000/month

Conclusion

At Moon Technolabs, we are proud knowledge bearers who understand the potential of the on-demand delivery market.

We can turn your concept into an MVP, as we did for Foodaloo – an Italian food marketplace app. Despite the challenges of figuring out nearby restaurants, our final product keeps drawing in new customers for the client. With flavourful dashboards and 100+ market products with professional tasters, it’s an innovative way to order food.

With a customer-centric mindset that continuously adapts to the changing tastes, your idea can withstand any challenge. Reach out to us for a FREE consultation for your next idea.

FAQs

01

How do you develop a grocery delivery app?

Creating a delivery app for your grocery business starts with a thorough understanding of customer shopping behavior and decking features accordingly with a price strategy. Once you have an innovative idea, you can approach a software development company that will guide you through the design, development, testing, and launch process.

02

How to make an app like Instacart?

Instacart consists of a customer-facing app and a business-facing app. It's a Peer-to-Peer (P2P) marketplace, and its business model combines on-demand, e-commerce, the sharing economy, and aggregator apps. To build an app like Instacart, your food-selling business needs to partner with several local suppliers to deliver goods to customers.

03

How much does it cost to build a grocery delivery app?

Building grocery apps like Instacart, Zepto, Dunzo, DoorDash, Uber Eats, and Amazon Fresh can cost between USD 8,000 and USD 45,000. The huge difference in the range is due to the features, complexity, platform, location, regulations, and the development team.
About Author

Jayanti Katariya is the CEO of Moon Technolabs, a fast-growing IT solutions provider, with 18+ years of experience in the industry. Passionate about developing creative apps from a young age, he pursued an engineering degree to further this interest. Under his leadership, Moon Technolabs has helped numerous brands establish their online presence and he has also launched an invoicing software that assists businesses to streamline their financial operations.

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