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India’s food delivery market has long been dominated by two key players—Zomato and Swiggy. However, a new contender is looking to shake things up. Rapido, originally known for its bike-taxi services, is now eyeing an entry into the food delivery space. The company is in talks with restaurant owners to create a competitive business model that could disrupt the industry’s existing commission structures. With its extensive two-wheeler fleet and a growing presence across Indian cities, Rapido aims to leverage its logistics expertise to challenge the duopoly of Zomato and Swiggy.
Rapido’s Bold Move into Food Delivery
Discussions Underway with Restaurants
According to reports, Rapido executives have been meeting with restaurant owners to discuss a potential entry into food delivery. The goal is to offer a more restaurant-friendly alternative to Zomato and Swiggy, both of which charge high commission rates that have been a point of contention in the industry. While discussions are still in their early stages, Rapido’s expansion strategy is taking shape.
Existing Presence in Delivery Services
Rapido is not new to the delivery business. It already provides food delivery services for individual restaurants using its bike fleet. Additionally, the company has been a delivery partner for Swiggy—an interesting relationship, given that Swiggy is also an investor in Rapido. However, Swiggy’s investment did not include an exclusivity clause, which means Rapido is free to pursue its own food delivery ambitions.
Expanding Beyond Ride-Hailing
Founded in 2015, Rapido has grown to become
A Market Ready for Disruption?
Rapido’s move comes at a time when the food delivery market is facing turbulence. Growth has slowed, and disputes between restaurants and aggregators over commission fees have intensified. Zomato CEO Deepinder Goyal has even acknowledged systemic issues affecting the segment. Despite these challenges, Zomato and Swiggy remain dominant, with Zomato holding a 57.1% market share, according to Bernstein.
Rise of Quick Commerce and New Entrants
The food delivery space has also seen a wave of new entrants, particularly in the “quick commerce” segment. Companies like Zepto, Blinkit (owned by Zomato), and Accel-backed Swish are all vying for a share of the market with ultra-fast deliveries. However, this model has faced backlash from restaurateurs, who argue that it adds pressure to an already struggling industry. The National Restaurant Association of India (NRAI) has even called for a third major player to challenge Zomato and Swiggy’s duopoly—making Rapido’s potential entry even more timely.
Rapido’s Strategy for Food Delivery
Rapido’s advantage lies in its fleet of two-wheelers, which can efficiently handle hyperlocal deliveries. By capitalizing on this existing infrastructure, Rapido could offer competitive delivery rates and faster service compared to its rivals. The company is also likely to position itself as a more restaurant-friendly alternative by offering lower commission fees, potentially attracting more partners to its platform.
What Undercode Say: Analyzing Rapido’s Food Delivery Ambitions
1. Can Rapido Compete with Zomato and Swiggy?
Rapido’s biggest challenge will be taking on well-established giants like Zomato and Swiggy, which have deep pockets, strong customer loyalty, and extensive restaurant partnerships. Breaking into this space will require aggressive marketing, seamless technology integration, and a compelling value proposition for both restaurants and customers.
2. The Strength of Logistics Infrastructure
One key advantage Rapido has is its extensive bike fleet, which is already optimized for rapid urban mobility. This gives it an edge in hyperlocal deliveries, potentially allowing it to offer faster service at lower costs. However, scaling food delivery requires more than just logistics—it also demands a strong digital platform, customer service, and restaurant relations.
3. The Restaurant Perspective: A Welcome Disruptor?
Many restaurant owners have expressed frustration with the high commission fees charged by Zomato and Swiggy, which can go as high as 25-30%. If Rapido offers a lower commission model, it could attract restaurant partners looking for better profit margins. However, restaurants will also be cautious about joining a new platform without a proven track record in food delivery.
4. Consumer Adoption: Winning Over Customers
The Indian food delivery market is fiercely competitive, and customer loyalty is hard to shift. Most consumers are already accustomed to using Zomato and Swiggy, thanks to their deep discounts, loyalty programs, and extensive restaurant options. Rapido will need strong incentives—whether in the form of lower prices, faster deliveries, or exclusive partnerships—to win over customers.
5. Investment and Expansion Plans
With a recent $30 million funding boost from Prosus, Rapido has the financial backing to experiment with new ventures. However, launching a nationwide food delivery service requires massive investment in technology, marketing, and customer acquisition. Whether Rapido can sustain these costs while keeping commissions low remains a critical question.
6. Quick Commerce vs. Traditional Food Delivery
The emergence of 10-minute food delivery has reshaped the market, but it has also sparked controversy. Restaurateurs argue that such rapid delivery services place unsustainable demands on staff and compromise food quality. If Rapido focuses on balancing speed with quality, it could position itself as a better alternative to ultra-fast delivery models.
7. The Regulatory Landscape
Food delivery aggregators in India have come under regulatory scrutiny, particularly regarding labor laws and fair trade practices. If Rapido enters the market, it will need to navigate these challenges carefully to avoid potential legal hurdles.
8. The Timing Factor
With the food delivery market slowing down, some may question whether this is the right time for a new player to enter. However, industry disruptions often create opportunities. If Rapido can address existing pain points—such as high commission fees and long delivery times—it has a real chance of making an impact.
Fact Checker Results
- Rapido’s food delivery plans are still in early discussions – No official launch date has been confirmed.
- Swiggy’s investment in Rapido does not include exclusivity – Rapido is free to enter the food delivery market despite Swiggy being an investor.
- Zomato holds the largest market share – Verified reports indicate that Zomato currently leads the Indian food delivery sector with a 57.1% share.
References:
Reported By: https://timesofindia.indiatimes.com/technology/tech-news/after-uber-rapido-set-to-take-on-zomato-and-swiggy/articleshow/118924501.cms
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