How to Start a Grocery Delivery Service Today and Profit?

It’s 7 PM and after a long day of work, a parent realises they are out of milk and fresh vegetables for dinner. Instead of rushing to the store, they open an app, add to their cart, and 30 minutes later groceries show up at their doorstep. This is not just convenience anymore, this is an expectation.

The global online grocery market is expected to hit $2.1 trillion by 2030 with a 25% CAGR from 2023 to 2030. In the US alone online grocery sales are expected to reach $250 billion by 2025 with more than 60% of consumers buying groceries online regularly.

Urbanization, dual income households and time starved consumers are driving this growth and grocery delivery is one of the most promising business opportunities today. In search of how to start a grocery delivery service? Keep reading to dig out all that you need to stay informed on.

Why 2025 is the Perfect Time to Start Your Grocery Delivery Business?

Consumer Habits are Locked In – The pandemic accelerated online grocery adoption and there is no going back. Even traditional shoppers now rely on delivery for at least some of their grocery needs.

Technology Levels the Playing Field – AI-driven inventory management, route optimization, and user-friendly grocery delivery apps make it easier for new entrants to compete with big players.

Market Gaps Exist in Local & Niche Segments – While giants like Instacart and Amazon Fresh dominate big cities, there is a growing demand for hyperlocal delivery, organic produce, ethnic groceries, and budget-friendly options in smaller towns and suburbs.

Conduct Market Research & Business Opportunities

The grocery delivery landscape in 2025 is moving fast, driven by three key themes: AI, automation, and sustainability.

AI & Automation

Businesses are using AI-powered demand forecasting, automated inventory management, and chatbot-driven customer support to boost efficiency. Automated fulfillment centers and drone deliveries are becoming more common, reducing delivery times by a huge margin.

Sustainability

Consumers are choosing eco-friendly grocery services that are sourced locally, have minimal packaging, and have electric or bicycle deliveries. Many startups are capitalizing on the “zero-waste” trend to differentiate themselves.

Hyperlocal Delivery Models

Instead of centralized warehouses, businesses are partnering with neighborhood stores to deliver faster, cheaper, and fresher. This model reduces logistics costs and retention of potential customers through hyper-personalized service. For founders-to-be, staying aligned with these trends is key to competitiveness.

Competitor Analysis

Understanding how the industry giants operate and where they fall short can help new grocery delivery startups find their niche.

Instacart-> Strengths are brand trust, vast retail partnerships, and AI-driven order management. However, reliance on third-party retailers limits control over pricing and inventory.

Amazon Fresh -> Seamless Prime integration and huge product selection, but struggles with delivery outside of major metros.

Walmart+ Grocery -> Competitive in price but struggles to maintain product quality due to massive inventory and distribution model.

Market Gaps & Opportunities for Customer Service

Many grocery delivery platforms still struggle with delivery times in suburban and rural areas.

Specialized grocery categories like organic, vegan, and ethnic foods lack strong dedicated delivery services.

B2B grocery supply for restaurants, caterers, and corporate kitchens is an underserved segment with high demand.

Who is Your Target Market?

Choosing the right market will determine your on-demand delivery business model and pricing strategy.

Urban vs Suburban Markets

Urban areas have higher order volumes but more competition and need optimized logistics.

Suburban markets have fewer competitors, perfect for personalized and community-based delivery services.

Niche Markets

Organic & Vegan Groceries for health-conscious consumers. They will pay a premium for fresh organic produce delivered sustainably.

Ethnic & International Foods for many communities that can’t find authentic ingredients. This seems to create demand for specialized grocery delivery.

B2B Grocery Supply for restaurants, cloud kitchens, and office cafeterias. They all need bulk deliveries with consistent quality in offering high revenue potential.

The Game-Changing Scope of Grocery Delivery Service Online

The grocery industry has changed a lot and if you’re looking to start a grocery delivery service, you need to understand why this business model works.

Digital-First Shopping

Consumers are ditching physical shopping carts for digital ones. With a smartphone in every pocket and a preference for on-demand services, online grocery shopping is the new norm.

Contactless Convenience for Customer Satisfaction

The demand for touchless transactions went up post-pandemic and it’s here to stay. Consumers prioritize safety and efficiency, and doorstep grocery delivery is a must-have service.

Subscription-Based Loyalty Programs

Companies like Amazon Fresh and Walmart+ have redefined customer retention with subscription perks. A well-structured membership model can give you predictable revenue and customer loyalty.

AI & Machine Learning Integration

 From personalization to inventory management, AI enhances the shopping experience and optimizes backend operations. Chatbots, for example, provide instant customer support, and reduce friction in the buying journey.

Beyond chatbots, AI is also revolutionizing customer engagement through AI-powered talking avatars. These virtual assistants can provide interactive, human-like communication, making online grocery platforms more engaging and accessible. Whether guiding users through the shopping process or offering personalized recommendations, this technology adds a new dimension to digital customer interactions.

How to Start a Grocery Delivery Service and Make Money?

Unlike traditional grocery stores, an online delivery business operates with distinct cost advantages and revenue opportunities.

Lower Overhead Costs

No need for expensive retail spaces, utilities, and a large in-store workforce, you can cut down operational costs big time.

24/7 Online Presence & Scalability

Physical stores have closing hours but an online business never sleeps. With the right infrastructure, you can go beyond local markets and serve a larger customer base.

Data-Driven Marketing Strategies

Every transaction generates data. AI powered algorithms can analyse customer buying patterns and offer personalised deals, optimise ads and improve customer retention.

What is the Role of an App Development Company in Your Online Grocery Setup?

Going online with your grocery business isn’t just about setting up a website, it requires a fully functional, high-performance app to meet customer expectations. This is where an experienced app development company comes in.

Seamless User Experience

A well-designed app ensures smooth navigation, quick product search, and an intuitive checkout process, keeps customers engaged.

Robust Backend Infrastructure

From real time inventory updates to order management and route optimisation for deliveries, an app development team builds the technology stack that keeps your business running.

Customisation & Scalability

Off-the-shelf solutions may not meet your business requirements. A professional development company builds an app that can scale with your business.

Advanced Features & Integrations

AI powered recommendations, push notifications, payment gateways and customer loyalty programs—all these require expert coding and integration.

Security & Compliance

Handling customer data requires robust security. An experienced development team ensures data encryption, compliance with regulations, and protection against cyber threats.

Pro tip-> A good digital presence starts with the right technology partner. Work with a reliable app development company and your grocery delivery business will be built for long term success.

Steps to Start a Grocery Delivery Service Online

Are you now eager to know how to start a grocery delivery service online? Let us not beat around the bush and head straight into the steps that follow. 

Step 1: Build or Choose the Right Tech Platform

Your tech infrastructure is the backbone of your grocery delivery business. You have two options:

Custom-Built Apps

Built from the ground up with custom features, gives you full control and scalability. Best for businesses looking for long term differentiation and flexibility.

White-Label Solutions

Ready-made platforms that can be branded with your logo, a faster and more affordable launch option. Ideal for startups with limited budgets.

Step 2: Features to Start a Grocery Delivery  Service Platform

User-friendly ordering system, which is an easy interface to browse, add to cart, and checkout.

Real-time inventory updates help you stay informed of stockouts and you can handle overselling by syncing product availability across warehouses, stores, and app users.

AI-powered recommendations suggest relevant products based on purchase history and boost sales through personalized shopping experiences.

Delivery tracking & route optimization lets customers to track orders in real-time while the system ensures drivers take the most efficient route for faster delivery.

Multiple payment options like credit/debit cards, UPI, e-wallets, and cash on delivery to cater to all customer needs.

Step 3: Need for a Grocery Delivery Website & Mobile App

A strong website and mobile app are the foundation of your online grocery delivery business. Here’s why,

Mobile and SEO-Friendly Website

Most consumers shop on mobile, so a responsive website is a must. And an SEO friendly website will give you organic traffic.

What are the Features that Enhance User Experience?

One-click checkout that simplifies the purchasing process, and reduces cart abandonment.

Personalized offers & discounts, AI-driven insights to create targeted promotions, and increase customer retention.

Live chat support enables real-time support, resolves customer queries instantly, and builds trust.

Step 4: Cloud Kitchens & Dark Stores for Grocery Delivery Service

To speed up fulfillment and reduce operational costs, many grocery delivery services are adopting dark stores and cloud kitchens.

Dark stores or warehouses set up for online orders, no in-store shoppers, and faster delivery times. Major grocery chains use dark stores to serve high demand areas.

Cloud-based operations provide us with a cloud-first approach to inventory management, delivery coordination, and customer engagement to become seamless and allow businesses to scale faster.

How to Start a Grocery Delivery Service: The Right Business Plan

Your business model is key to your grocery delivery service’s success. It should match your budget, operational capabilities, and market demand. Here are the most common models in the industry:

What are the Types of Grocery Delivery Services?

When you are looking for how to start a grocery delivery service, the following are the important types of business models you need to know.

Model #1: Inventory-Based Model

You stock groceries in a warehouse or fulfillment center. Customers order through your platform and you manage procurement, storage, and delivery.

Examples: Amazon Fresh, BigBasket.

Model #2: Marketplace Model

You partner with local grocery stores and list their products on your platform. Customers order from their preferred stores and you facilitate the delivery.

Examples: Instacart, Shipt.

Model #3: Hybrid Model

A mix of inventory-based and marketplace models to balance stock control and wider availability. Some fast-moving products are stored in-house and others come from partner stores.

Example: Walmart Grocery.

Model #4: Subscription-based Model

Customers pay a monthly fee for scheduled grocery deliveries. Typically offers convenience, discounts, and exclusive benefits for members.

Examples: Misfits Market, Amazon Fresh (Prime subscription)

Pros & Cons of Each Grocery Delivery Service Business Model

Model	Pros	Cons
Inventory-based	Full control over pricing, stock, and quality. Higher profit margins.	High initial investment, warehousing, and supply chain complexity.
Marketplace	Lower operational costs. Faster scaling through partnerships.	Dependency on store partners. Less control over stock and pricing.
Hybrid	Greater flexibility and service optimization. Better product availability.	Requires efficient logistics and inventory management.
Subscription-based	Predictable revenue stream. Higher customer retention.	Needs a strong customer acquisition strategy. May not suit all consumers.

Your choice should depend on your funding capacity, target market preferences, and long-term business vision.

Logistics & Delivery Infrastructure of Grocery Delivery Services

One of the biggest decisions when starting a grocery delivery service is whether to manage your own delivery fleet or partner with delivery aggregators like Uber Eats, DoorDash or local courier services. Each has its pros and cons.

Working with Third-Party Services (Uber Eats, DoorDash, Local Couriers)

Many new grocery delivery businesses choose to partner with established delivery platforms. This lets you get up and running fast without the upfront investment in vehicles and personnel.

Third-Party Delivery Partners

Pros	Cons
Faster Market Entry – Start delivering groceries almost immediately without building a fleet.	Commission Fees – Delivery partners take a percentage of each order, reducing profit margins.
Wider Reach – Access an existing network of couriers for broader location coverage.	Limited Branding – Customers associate the delivery experience with the aggregator, not your business.
Less Operational Overhead – No need to handle vehicle maintenance, driver recruitment, or insurance.	No Control – Delays, customer complaints, or mishandling of groceries can harm your brand reputation.

In-House Delivery Fleets (Branding, Cost Efficiency, Control)

Managing your fleet can be a game changer if you want to build a strong brand and control the entire customer experience. While it requires a higher upfront investment, it can pay off in the long run.

Pros	Cons
Stronger Brand Identity – Your vehicles, uniforms, and team represent your brand, building trust.	High Initial Investment – Requires capital for vehicles, drivers, and fleet management.
Better Customer Experience – Full control over grocery handling, ensuring freshness and quality.	Operational Complexity – Managing drivers, routes, and maintenance adds workload.
Cost Efficiency Over Time – Avoids long-term commission fees, increasing profitability.	High Initial Investment – Requires vehicle, driver, and fleet management capital.

Grocery Delivery Service Innovations

The last-mile problem delivering groceries to the customer’s front door. It remains a major challenge in grocery delivery. Innovations in logistics are changing the way businesses approach last-mile delivery.

Drone Deliveries & Autonomous Grocery Bots

Tech giants and startups are investing big in automation to streamline grocery delivery.

Drone Deliveries

Amazon and Walmart are testing drone technology to deliver groceries in record time, reducing traffic on the roads and cutting delivery costs.

Autonomous Grocery Bots

Self-driving delivery bots (like Starship and Nuro) are popping up in urban areas for contactless and super fast grocery delivery.

How this Affects You?

If regulations in your area allow it, integrating drones or bots can be an innovative advantage over the competition. Automation can reduce dependency on human labor and reduce operational costs in the long run.

Securing Suppliers & Inventory Management

Supply chains are key to a delivery service. Working with local farmers means fresh, organic produce and supporting small-scale agriculture. Working with local shops means you can offer a wide range of products without storing large warehouses. Exclusive partnerships with select suppliers can also differentiate your business and build a loyal customer base.

Negotiating with Suppliers & Bulk Buying Strategies

Supplier deals can save you money and increase profit. Buying in bulk often means discounts, but you need to plan carefully to avoid overstocking perishables. Committing to regular purchases can get you better pricing and priority supply, especially during peak seasons. Comparing quotes from multiple suppliers gives you leverage to negotiate the best terms for your business.

Managing Stock & Avoiding Waste

AI inventory management helps grocery businesses manage stock and reduce waste. Automated tracking systems monitor stock in real-time and send alerts when you need to restock. Smart reordering means purchases match demand and prevent excess stock from going to waste. AI shelf life prediction tools also help identify products nearing expiration, and you can apply discounts or promotions to reduce waste.

Using Demand Forecasting to Minimise Waste

Accurate demand forecasting is key to reducing waste and being efficient. Seasonal trends help you stock the right products at the right time to prevent shortages and overstocking. Customer purchase data gives you insight into buying habits so you can plan inventory better. Real-time sales tracking further enhances efficiency by adjusting stock levels based on daily demand fluctuations.

Eco-Friendly Packaging & Carbon Neutral Delivery

Sustainability is becoming a deciding factor for consumers. Biodegradable and recyclable packaging reduces the environmental impact and appeals to eco-warriors. Carbon-neutral delivery like electric vehicles and bicycle couriers reduces emissions and promotes sustainable logistics. Working with ethical suppliers who follow fair trade and sustainable farming practices adds to your brand credibility and customer trust.

Gamification Idea That Works, Grocery Quest – Shop, Earn & Win!

To make grocery shopping more fun, introduce a gamified loyalty program called “Grocery Quest – Shop, Earn & Win!” This turns grocery shopping into an activity you’ll want to do more of. Instead of just earning points per purchase, you can level up by completing challenges and unlocking rewards.

The program has daily and weekly challenges to encourage more orders. For example, get 10% off your next order for ordering 3 times in a week, or earn 20 points for buying a fruit and a veg in one order. And a spin-the-wheel reward system adds an element of surprise – after every order over a certain amount you get a free spin to win discounts, cashback or free delivery.

Referrals are another big part of Grocery Quest. When you refer a friend, both get extra points and move up a higher loyalty tier with better discounts. And to make it even more exciting, frequent shoppers can unlock mystery box surprises where you get a free grocery item when you reach a milestone, like your 10th order.

This gamification works because it encourages repeat orders, social engagement through referrals, and makes grocery shopping interactive, not transactional. By making everyday purchases a rewarding experience, Grocery Quest builds long term loyalty and increases order frequency.

Source: https://www.instacart.com/

Integrate AI & Automation to Future-Proof Your Grocery Delivery Business

To stay ahead in the competitive grocery delivery space, integrating AI and automation is key.

AI-Powered Inventory & Predictive Analytics

AI can help optimize inventory management by analyzing shopping patterns and predicting demand. This reduces waste, prevents stockouts and ensures customers get what they need when they need it. AI driven recommendations can also personalize the shopping experience and increase customer retention.

Drone & Autonomous Vehicle Delivery

With last mile delivery costs on the rise, investing in autonomous delivery solutions can save big. Amazon and Walmart are already testing drone deliveries. While there are regulatory hurdles, being ahead of the curve can make your business a leader in grocery delivery innovation.

Ready to Start a Grocery Delivery Service that Thrives?

Grocery delivery is no longer a trend but a necessity with consumers expecting convenience, speed, and personalization. So launching a grocery delivery service in 2025 and beyond is a golden opportunity for entrepreneurs. While the journey may seem tough, a grocery delivery app development company with the right approach and technology partner can turn your vision into a scalable, profitable business.

Why Choose Appkodes for Your Grocery App?

Building a grocery delivery business from scratch requires more than just an app that demands a robust, scalable, and AI-driven solution that can keep up with the changing market dynamics. That’s where Appkodes comes in.

With a proven track record in delivery app development, Appkodes helps businesses launch feature-rich grocery apps that cater to modern customer needs. Whether you’re looking for a marketplace model, dark store setup or hybrid approach, we tailor our grocery delivery script to align with your business goals.

What sets Appkodes apart?

We offer pre-built grocery delivery solutions for fast market entry and custom-built apps to match your business model. With AI automation you can manage real-time inventory, optimize routes and provide a personalized shopping experience.

Our solutions also support seamless third-party integrations for payments, logistics, and analytics for smooth operations. Plus our scalable architecture allows your business to grow without limits. If you want to launch a grocery delivery service without tech roadblocks, Appkodes is your go-to development partner.

Your Grocery Delivery Service Checklist

Before you start, ensure you have these foundation steps covered,

Market Research -> Identify your target audience, competitors, and profitability factors.

Business Model -> Choose between inventory based, marketplace, hybrid or subscription model.

Technology Partner -> Collaborate with Appkodes to create a grocery delivery app.

Logistics & Operations -> Set up delivery fleets, partnerships or third party logistics providers.

Marketing & Growth Strategy -> Implement customer acquisition and retention plan to drive sales.

Scale & Innovate -> Leverage AI, automation and emerging tech to stay ahead.

Future of Grocery Delivery Beyond 2025

The grocery delivery landscape is changing fast and will bring innovations that will change the industry. AI powered smart shopping assistants will offer personalized recommendations based on user behavior, to enhance customer experience.

Blockchain based food tracking will improve supply chain transparency to ensure food safety and authenticity.

Metaverse grocery shopping will introduce virtual stores and provide an immersive and interactive shopping experience. Drone and autonomous vehicle deliveries will enable faster and cost-effective order fulfillment.

With the right strategy and the right technology partner, you can future proof your grocery delivery business and stay ahead.

Ready to get started? Contact Appkodes today to build your grocery delivery app and dominate the on-demand grocery market!