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Million Dollar Apps: Online Grocery Delivery Apps
14 May 2020

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Million Dollar Apps: Online Grocery Delivery Apps

A lot of effort goes behind making a mobile app successful. An app simply doesn’t become a million dollar app right after launch. Careful planning, skilled development, creative marketing, acquiring a user base all combined are responsible for making a million dollar app. 

Today we will take a look at how online grocery delivery apps have become one of the fastest growing apps as a result of a natural disaster. We will look at two online grocery delivery apps that have grown exponentially in a short time: Instacart and InstaShop.

 

Increased demand for Online Grocery Delivery Apps

Increased demand for online grocery delivery

These apps have presented a solution at the time of crisis, the covid 19 pandemic. The coronavirus pandemic emerged in December 2019 originating from China. It gradually spread to other countries before becoming a global disaster with millions affected and hundreds of thousands of lives lost. 

The world was not prepared for a disaster like this with its impact over 200 countries. To stop the spread of the diseases, most countries enforced a lockdown and maintained social distancing. Airports and waterways were shut down and all non-essential businesses were shut down.

Obviously, these measures affected the global economy severely. Stock markets collapsed, many businesses failed, organizations were forced to layoff their employees, shortage of supplies occurred. 

Due to panic buying and hoarding, essential items went out of stock. People could not risk going out to shop for their daily necessities. All of this resulted in a shift in buying behavior among masses. 

There was a transition to online shopping for purchasing the essential goods such as medicines and groceries. The online grocery delivery apps saw a massive surge in the demand for their services.

With the help of supporting data, we will talk about Instacart and Instashop apps and how they grew  massively during this global disaster and transcended to million dollar apps. Let’s take a look at Instacart first.

 

Instacart success story

Instacart is a grocery delivery and pick-up service based in San Francisco and provides their service all over the USA and Canada. They cater to over 5500 cities in these countries and are partnered with over 350 retailers comprising 25,000 grocery stores.

Some of the popular grocery stores include Aldi, Costco, CVS health, Eataly, Kroger, Petco, Safeway, Target, and Wegmans. Customers order through the app and they are delivered by an Instacart personal shopper. 

Instacart makes money by charging a delivery fee of  $3.99, along with a 5% service charge. Instacart was founded by Apoorva Mehta in 2012. The company experienced modest growth since then and found its big break in 2018 when it partnered with Krogers, Walmart, and other major retailers. 

The following year of 2019 saw more partnerships and expansions but what really propelled the company to success was the rise in demand during the covid-19 pandemic. Below is the website traffic data that corroborates this:

Instacart traffic

Here is the traffic data of instacart.com courtesy of SimilarWeb. The graph displays the total website and mobile web traffic of the website over a 6 month period. From November 2019- Feb 2020, the traffic increased from 14 million to 16 million. 

From the graph, it is evident that the traffic skyrocketed in the subsequent months. The growth corresponds with the time the coronavirus became widespread in the USA and Canada. From 16 million in February, the traffic doubled to 33 million in March and by April it exceeded 54 million. 

This kind of growth is unprecedented and unheard of before this pandemic completely changed consumer habits. We can only expect the traffic to go up in the coming months. Instacart responded to the increase in demand by hiring 300,000 additional workers in March 2020. 

Additionally, they introduced contactless delivery options, safety kits for shoppers, and sick leave for shoppers. The company was valued at $7.87 billion in November 2018. InstaShop has a similar story to tell.

 

InstaShop Success Story

InstaShop is a Dubai based online grocery delivery app that is part of the Jabbar Internet Group. They started their service with the aim of bringing the supermarket at home. They promise an average delivery time of 45 minutes.

InstaShop was founded by John Tsioris in 2015, an on-demand online grocery delivery service in the UAE.  They deliver 20 categories of groceries along with additional services such as pharmaceutical products, organic foods, and house cleaning. 

InstaShop captured the attention of many venture capitalists, including Jabbar Internet Group, Venture Friends, and others. They received $350,000 in the first round and $750,000 in public funding. 

Currently, InstaShop has expanded to four other countries: Egypt, Qatar, Lebanon, and Greece. They employ over 200 people and have further plans for expansion. Initially, the company struggled to take off but in recent times, their fortune turned around. 

They experienced a far more exponential growth in terms of website traffic. Below is the traffic overview of InstaShop for the last 6 months:

Instashop traffic

In November 2019, they barely had any traffic and the next month they had 1000 visitors. That completely changed from January 2020 when it jumped from 1000 visits to nearly 25,000 visits. The following months saw more jumps from 37k in February to 88k in March and 165k in April.

The crazy growth can only be attributed to the rising demand for online grocery delivery during the covid-19 pandemic. InstaShop is a perfect example of how a regular app can transform into a million dollar app given the right circumstances.

 

In this article, we have only focused on two online grocery delivery apps. There are many more success stories like Instacart and InstaShop. Instead of despairing over a pandemic, they took initiative and presented a solution to the problem faced by many. The question is, do you have what it takes to create the next million dollar app.

Royex Technologies is a leading Mobile App Development company in Dubai. We at Royex can help you create an application like InstaShop or Instacart at a very affordable price based on your requirements. You can contact us for more information. You can mail at info@royex.net or call on +971566027916

About the Author

Rajib Roy

Rajib Roy, CEO of Royex Technologies is a highly motivated, genuinely flexible and exceptionally hard-working person. He is a Systems Architect with a background encompassing a decade of experience in software development. Having played a key role in the development and deployment of projects and solutions that have been adopted by leading retail, hospitality and travel sector clients, his skills lie in planning cost-effective solutions and building and coordinating dedicated, highly-skilled teams that convert ideas and concepts into innovative, functional and ultimately profitable products.

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