Are you interested in starting a business in the grocery retail space? Then, taking it online should be your first step.
Today, consumers in Asia, USA, Europe, and Australia have gotten used to ordering groceries online.
In fact, the number of users of online grocery delivery apps will rise to 2,222.0m million by 2029.
This rising demand for online grocery delivery businesses makes it the best time for startups to invest.
But starting an online grocery business in this market is easier said than done. As it is complex, it often leaves entrepreneurs wondering, “How can I set up an online grocery delivery business?”
Hence, we’re outlining the step-by-step process of setting up your own online grocery delivery business in this blog—so you can get a fair idea of the grocery delivery market, its business model, and the costs involved.
But before we delve into the nitty-gritty, let’s explore the market of online grocery delivery.
Overview Of The Grocery Delivery Market
Before we dive into the business model of online grocery delivery, let’s look at the future of the online grocery retail market and see if it has scope for growth.
Projections show the online grocery delivery market will be reaching $2,159 billion by 2030.
The grocery delivery market has gained valuable popularity in the last few years due to its convenience and ease of use.
As people lead busy lives, getting groceries delivered to the doorstep has become a convenient way of shopping for household products.
Let’s look at some case studies. Just last month, Walmart’s online grocery shopping app had about 1 million downloads. As of 2022, total users on the Instacart app amounted to 13.7 million.
Hence, if you’re serious about starting your own grocery delivery business, then this is the perfect time to do so.
The market shows promising growth, and the business model of online grocery delivery is accessible. This means you’ll be able to reach out to more customers online than in-store—and capture significant revenue as you do so.
Start Your Online Grocery Delivery Business In 2025
Since the market seems lucrative for online grocery delivery businesses for years to come, it is appropriate for entrepreneurs to set their foot in this direction and start their own online grocery delivery business.
In this section, we list the steps to start a grocery delivery business.
Identify the target market
The first step to starting an online grocery delivery business is conducting market research and figuring out the target market.
This means finding out everything about the needs and wants of your grocery delivery app users.
Once you have the understanding, you can delve deeper into their shopping behaviors.
If you are just starting, then having a defined target market will not only help you in starting your business but will also help in creating effective marketing strategies.
Choose your grocery delivery business model
In its true essence, an online grocery delivery business works on the principle of picking up an item from the vendor and delivering it to the buyer’s doorstep. Grocery delivery businesses operate through various models.
The platform model connects customers with existing stores using a mobile delivery app. This model minimizes upfront costs but also offers less control.
Inventory-based models involve owning and managing stock, allowing for higher margins. However, significant investment is required here.
Hybrid models combine these, offering maximum flexibility to business owners.
Hyper-local models focus on rapid delivery within specific areas, building strong local relationships.
Finally, subscription models offer recurring deliveries, generating predictable revenue but requiring careful customer management.
The business model of your choice should consider the following factors: Available resources, target market, scalability goals, and risk tolerance.
Reviewing your revenue model
Once you’ve picked your business model, you need to decide upon your revenue streams.
By analyzing potential revenue sources, you can make informed decisions about pricing, marketing strategies, and operational efficiencies.
Here are some common revenue streams for grocery delivery businesses:
Delivery Fees: Charging customers a flat fee or a percentage-based fee for each delivery.
Service Fees: Adding a service fee on top of the order total, often a percentage.
Subscription Fees: Offering subscription plans with benefits like free delivery, exclusive discounts, or priority service.
Commission on Sales: For platform models, you can also earn commissions on each order placed through the platform.
Advertising Revenue: Selling advertising space on the app or website to other businesses.
Upselling and Cross-selling: Offering add-ons like meal kits, prepared meals, or household items to increase order value.
Creating a multi-vendor grocery delivery app
The next step is to create a multi-vendor grocery delivery marketplace. This can be done in one of two ways:
Custom app development
A customized grocery delivery marketplace app development allows you to tailor the functionality and design of the app. Choose this approach only if you’ve extremely specific custom requirements and a varied target audience.
Custom app development means the entire app development process starts from scratch. While there are merits to this approach, it is definitely time-consuming and expensive.
Hence, it is not the best option for entrepreneurs starting with limited resources.
Opting for a readymade grocery delivery solution
The second approach is to opt for a ready-made, SaaS-based solution to launch an online grocery delivery marketplace app. Building an app from the ground up requires significant time, resources, and expertise in development, design, and testing.
Contrary to that, Deonde’s pre-built grocery delivery solution eliminates this need, allowing you to launch your business much faster and at a lower cost.
Deonde’s platform has comprehensive features, including order management, delivery tracking, payment gateways, customer management, and more.
This saves you the time and effort of developing these features individually.
Additionally, Deonde’s grocery delivery mobile app is designed to scale with your business growth. It can handle increasing order volumes and adapt to your evolving needs.
Selecting features
In today’s competitive market, selecting the right features for your online grocery marketplace is crucial for attracting and retaining customers.
Also, from a business point of view, the grocery delivery app’s features sustain efficiency and improve workflows.
Since a grocery delivery app has multiple stakeholders like users, sellers, delivery drivers, and admins—it’s important to include functionality for all.
The user-facing app has features like personalized recommendations, multiple payment options, order tracking, flexible delivery options, easy returns, loyalty programs, and push notifications.
For sellers, essential features include easy onboarding, inventory management tools, an order management system, and access to analytics and reporting.
The platform should have a robust admin panel with strong security measures and tools for up-scaling.
For drivers, include modules like earnings tracker, navigation, in-app communication channels, and rating system.
By carefully selecting and implementing these features, you can create a compelling online grocery marketplace that provides a seamless shopping experience.
Marketing your online grocery business
To effectively reach your target audience and broaden your customer base, try multi-channel marketing and promotion of your grocery business.
Search Engine Optimization (SEO): By optimizing your website and mobile app for relevant keywords, you can improve your search engine rankings and increase organic visibility.
Content Marketing: Create valuable and informative content such as blog posts, articles, recipes, and social media posts related to food, cooking, and healthy living. This not only attracts organic traffic but also builds your brand.
Social Media Marketing: Leverage popular social media platforms like Facebook, Instagram, and TikTok to engage with your target audience and run ads.
Pay-Per-Click (PPC) Advertising: Run targeted ads on Google Ads and social media platforms to reach specific demographics and drive immediate traffic to your mobile app.
Email Marketing: Build an email list to nurture customer relationships, promote special offers, and inform customers about new products and services.
Personalized email campaigns can significantly improve customer engagement and drive repeat purchases.
By implementing a well-rounded marketing strategy, you can effectively reach your target audience, build brand awareness, and drive sustainable growth for your online grocery business.
Bonus: Explore The 10-Minute Grocery Delivery Business Model
The 10-minute grocery delivery model is a ground-breaking concept that prioritizes speed and convenience for consumers.
It leverages a network of strategically located dark stores and small, warehouse-like facilities stocked with frequently-ordered grocery items.
These stores are strategically placed in densely populated areas to minimize delivery distances.
Here’s a breakdown of the key elements of 10-minute grocery delivery:
Dark Store Network: Dark stores are designed for efficient order fulfillment, with products readily available for quick picking and packing.
Real-time Order Tracking: Enables customers to monitor their order’s progress in real-time.
Optimized Delivery Routes: AI-powered algorithms analyze real-time traffic and rider availability to optimize delivery routes, minimizing travel time.
Inventory Management Systems: Sophisticated systems track inventory levels in real time, ensuring products are always available and minimizing stock-outs risk.
Dedicated Delivery Fleet: A dedicated fleet of delivery personnel is essential, with riders trained for quick and efficient deliveries, often using motorcycles or scooters for faster navigation.
Achieving profitability under this model can be challenging due to high operating costs (rent for dark stores, rider salaries, technology investments).
Additionally, the market is highly competitive, with numerous players like Zepto and Swiggy Instamart vying for market share.
Despite these challenges, the 10-minute grocery delivery model has gained significant traction, offering consumers unprecedented convenience and transforming the way we shop for everyday essentials.
Cost Of Grocery Delivery App Development
The cost of developing a grocery delivery app is a significant factor to consider for any startup.
While a rough estimate might range from $15,000 to $60,000, it’s crucial to remember that this is a very broad range. Several key factors can drastically influence the final cost.
One major factor is the app’s complexity and the number of features included.
A basic app with limited features and a simple user interface will naturally cost less than a premium app with advanced features like personalized recommendations, AI-powered inventory management, and loyalty programs.
The development team and their location also play a crucial role in determining the overall cost.
In-house development requires hiring and managing a team, which can be expensive. Outsourcing to development agencies or freelance developers can be more cost-effective, especially if you choose teams in regions with lower development costs.
Additionally, it’s important to remember that the initial development costs are just the beginning.
Ongoing costs include app store fees, server maintenance, customer support, and potential future updates and upgrades.
Build Your Grocery Delivery App Business With Deonde
Hence, for businesses that are just starting out, Deonde’s ready-made grocery delivery app solution is the way to go, as it is a more cost-effective solution than traditional app development.
Deonde eliminates the high upfront costs associated with custom development, making it a much more affordable option for startups with limited budgets.
With Deonde’s pre-built solution, businesses enter the market quickly and start capitalizing on their business idea.
By using Deonde’s solution, your business can focus resources on building a brand, acquiring customers, and managing operations—rather than getting bogged down in the technical aspects of app development.
By leveraging Deonde’s solution, startups can significantly reduce their initial investment, accelerate their time to market, and increase their chances of success in the competitive grocery delivery market.
So what are you waiting for? Build your very own grocery delivery app business with Deonde today!
Conclusion
The future of grocery shopping is undeniably online.
Hence, if you, too want to ride this wave and build your own grocery delivery business, then you must start by understanding your target market.
Next, leverage technology effectively and focus on providing a seamless and convenient customer experience.
Lastly, remember to continuously adapt and innovate to stay ahead of the curve and capitalize on the evolving market dynamics.
Hence, by carefully planning, choosing the right business model, and leveraging the latest technologies like Deonde’s SaaS-based grocery delivery suite—you too can successfully launch and scale your own grocery delivery business in 2025.
Faqs:
Q: What are the Key Factors to consider when starting an Online Grocery Delivery Business?
A: Starting an online grocery delivery business requires careful planning and consideration of several key factors. Start by identifying your target market. Then, build your business plan and outline your revenue streams. Build or use ready-made grocery delivery apps to establish reliable partnerships with retailers. Lastly, consider optimizing logistics for rapid deliveries.
Q: How can I Attract Customers to my Online Grocery Delivery Business?
A: Begin by developing a strong online presence through a user-friendly website and online grocery delivery mobile app. Run targeted advertising campaigns on social media and search engines and offer promotions and discounts to build a loyal customer base. Lastly, leverage customer reviews and testimonials to build trust and credibility.
Q: What are the Challenges of Running an Online Grocery Delivery Business?
A: Running an online grocery delivery business presents several challenges, like battling competition, tracking inventory, ensuring timely deliveries, accurate order fulfillment, customer acquisitions, and optimizing marketing campaigns.
Q: How can I Ensure the Success of my Online Grocery Delivery Business?
A: Ensuring the success of your online grocery delivery business requires a focus on customer satisfaction and operational efficiency. This can be achieved by leveraging technological tools like online grocery delivery apps. These apps track user behaviors and can personalize shopping experiences. It can also help with tracking inventories, drivers, and sales numbers—bringing in some much-needed workflow efficiency.
