Food delivery apps retain only 22% of new users in first week of install: Report

The retention of a higher percentage of new users is key for any business to be successful and sustainable. It has become more important for today's tech-enabled and app-based businesses.

As per a recent study on food delivery apps, these firms fail to retain most numbers of new users on their platforms.

For every 100 new users acquired by food delivery apps, only about 22% remain active on the platform by the end of the first week, said a CleverTap study.

The report further said that merely 25% of users who install the food apps actually complete the registration and sign up process. A new user takes an average 22 minutes of time to register and log in to the apps in the food delivery category.

Over 85% of new users stop using food apps within the first two weeks of installation, the study added.

According to Almitra Karnik, global head of marketing of CleverTap, the lack of marketing to aware users about apps value and repeat transactions for new users is one of the reasons. The new users need to be provided a better interface.

Karnik also added that the acquisition cost is also on the higher side, about 5-times, in compare to retention cost. This makes it very important for the food tech industry to offer users data driven-service, she added.

However, the loyal users show a higher retention rate of 65% from Day 1, as compared to new users, of which 77% drop after a week.

In India, food delivery apps are fueling next wave of disruption. In the last couple of years, the food and drink app downloads have gone up significantly. In 2019 March quarter, there were about 46.4 million downloads registering about 3X growth year-on-year (YoY).

For the report, CleverTap claimed to have analyzed billions of anonymous data points including user behavior within the app, responses to engagement campaigns, and conversions to understand the key factors that contribute to growth, across food delivery apps.

Globally, online food ordering is expected to grow to $365 billion by 2030 with 20% yearly growth rate.