Learning From the Failure of On-Demand Food Delivery App Foodpanda, Which Actually Helps You to Grow Through Business
Posted on May 25, 2019 By Ankit Virani
Because of the urbanization and higher living standards, business through online food delivery app is thriving like never before. Looking at the popularity of the on-demand delivery apps, one shouldn’t be surprised to know that on-demand food delivery market will hit the $161.74 billion by 2023.
Top on-demand food delivery app development companies are developing next-gen food delivery apps which are justifying core purposes in the most possible ways. It avails people to get rid off all annoying problems they face while ordering food on the telephone. Moreover, it upsurges employment opportunities by letting anyone be a delivery partner.
However, not all on-demand food delivery apps are earning well. Many internal and external factors are causing established food delivery apps to suspend their services. A well established on-demand food delivery service provider company named Foodpanda which is letting people order food from its own chain of restaurants recently suspended its services in India. According to a company spokesperson, they will relaunch the service after redefining the business model and expanding their facilities and kitchens.
In this blog, we will study the reasons behind its failure and what you can learn from the failure of Foodpanda for your on-demand food delivery business. But first, let’s first know about the Foodpanda and its journey particularly in India where Foodpanda struggled the most.
Insight into Foodpanda
Foodpanda is Germany-based on-demand food delivery app. In 2012, it was founded by Ralf Wenzel with his three business partners. After two years of its initial launch, Foodpanda started dominating the markets of other countries. In February 2014, Foodpanda has acquired a Pakistan-based on-demand food delivery service provider company named Eat Oye, which was a major rival of Foodpanda.
Till 2016, Foodpanda made its services accessible in all major countries of the Asia and middle east. But with the advent of other on-demand food delivery apps which had a more profitable business model and industry-defined business strategies, Foodpanda couldn’t sustain its growth. In December 2016, Foodpanda was acquired by a German competitor Delivery Hero. After one year, Foodpanda’s business of India was acquired by Ola which is India-based ride-hailing giant.
► Ola’s journey with the Foodpanda
When Ola acquired Foodpanda, they decided to run the business of Foodpanda with their own chain of restaurants. Currently, Ola has 50 restaurants and four private labels. These are Flrt, The Khichdi Experiment, Lovemade, and Grandma’s kitchen. During the initial days, Foodpanda was aggressively giving a heavy discount to the users and processing 3 million orders in a month. But later in 2018, they revised its strategy as other on-demand food delivery service provider companies like Zomato and Swiggy took the Indian market by storm. Against the services and business model of Zomato and Swiggy, Foodpanda became clumsy. At last, on the morning of the 22nd May 2019, they dropped their delivery services and laid off several employees.
► Why Foodpanda failed?
There was the time when Foodpanda was processing 3 million orders per month, then what went wrong for the Foodpanda that they suspended its services? Let’s find out.
» A poorly crafted business model
Unlike crowd-puller food delivery service provider companies Zomato and Swiggy which are working with thousands of restaurants to offer the food of all cuisines, Foodpanda decided to create their own network of the restaurants. With this decision, they remained limited to only 50 restaurants. They failed to provide diverse food experience to the users and so, users dodged Foodpanda as soon as they get other food delivery services which are allowing them to try different cuisines.
» Paid no heed to the local needs
In order to be successful in on-demand food delivery business, study the locality well. Foodpanda didn’t bother to find the food choices of the different localities. They continued promoting their wrong cuisines at the wrong locations. A Singapore based food delivery service provider company named Grain becomes one of the top on-demand food delivery service provider companies by offering different local foods to different localities.
» Bad user experience
Even though top on-demand food delivery app development companies like Coruscate Solutions are able to bring a personalized menu feature in the app, Foodpanda app wasn’t equipped with such kind of user-friendly features. On-demand app delivery app Grain which we have just discussed is armed with a personalized menu feature which suggests the food to the users based on their previous orders and other data of them.
» Grotty back-end
Many users have claimed that their orders have been accepted even though the restaurants are closed. Not only users but many restaurant owners have also claimed that many times they were not notified for the orders. These blunders are the result of the grotty back-end of the Foodpanda ordering system.
We at the Coruscate not only develop an error-free app but helps you to define the business model too.
Which are the technologies top on-demand food delivery app development companies use to develop food delivery app?
To make it simple, let’s divide the core functions of the food delivery app into three parts – information sharing, payment processing, and tracking.
- Talking about the information sharing, then it is the core function of the food delivery app as it shows the information about the meal to the users. We usually call it menu. The data of the menu is not stored in the app itself, but it is stored on a database server. To collect and display the data to the users, developers have to write business logic and to use different APIs.
- Another must-have functionality of on-demand food delivery app is payment processing. This is one of the major requirements of the food delivery app which demands the highest ever accuracy. To make it error free, all top food delivery app development companies are integrating a good payment gateway and payment processor in the app. But choosing a suitable payment gateway according to the app requirements is not a cakewalk. There are lots of best practices an app development company has to perform to get the perfect payment gateway. If developers of the food delivery app development company are not intelligent enough, unlike developers of the Coruscate Solutions, they will end up integrating inappropriate payment gateway in the food delivery app.
- All the top food delivery apps are equipped with live tracking to deliver a best-in-class user experience to the users. Developers use Google map API to enable live tracking feature in the food delivery app.
- Talking about admin features, business intelligence plays a big role. BI enabled admin panel gives the predictive views of business operations. BI includes features like reporting, online analytical processing, analytics, and process mining. BI features help app owner to identify, develop and create new business opportunities with the help of structured and unstructured data. Coruscate Solutions is one of the on-demand food delivery app development companies which has earned expertise in integrating features of the business intelligence in the admin panel.
So if you are also planning to start your own food delivery business and looking for food delivery app development? Just have a look at our Food delivery app demo here.
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