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Rapido, a fast-growing ride-hailing company, is reportedly preparing to take on food delivery giants Zomato and Swiggy in the highly competitive food delivery market. The company, which began its journey as a bike-taxi platform, has been in discussions with restaurant owners to launch a food delivery service on its platform. This move could disrupt the current commission structures that have long been a point of contention for both restaurants and consumers.
With a proven track record in delivering services through its extensive two-wheeler fleet, Rapido aims to introduce a fresh approach to the food delivery sector. The company is looking to tap into the growing demand for quick commerce and capitalise on its established presence across 100+ cities in India. As the company strives to increase its market share, it seems poised to challenge the current market dominance of Zomato and Swiggy.
Rapido’s Strategic Move to Enter the Food Delivery Market
Rapido’s entry into the food delivery space comes at a time when the sector is experiencing turbulence. A significant issue in the market has been the high commission fees charged by delivery aggregators, a factor that has led to rising tensions between restaurant owners and platforms like Zomato and Swiggy. According to reports from the Economic Times, Rapido has been holding talks with restaurant owners to devise a business model that could shake up the existing commission structure.
In addition to its plans to introduce food delivery services, Rapido is already involved in facilitating deliveries for individual restaurants through its two-wheeler fleet. The company also delivers food on behalf of Swiggy, an investor in Rapido. However, there is no exclusivity clause in the investment agreement, which leaves room for Rapido to explore food delivery services independently.
Rapido’s foray into food delivery seems to be part of a broader strategy to diversify its offerings. Having already established itself as the second-largest player in India’s competitive ride-hailing market, the company aims to expand its services further. After reaching a milestone of over $1 billion in annual gross merchandise value (GMV) from its ride-hailing business, Rapido is looking to extend its footprint to 500 cities in India this year.
Competitive Landscape: Challenges Ahead for Rapido
Entering the food delivery space means Rapido will face stiff competition from Zomato and Swiggy, which continue to dominate the market. Despite challenges in the form of disputes over commission rates and slowing growth, Zomato maintains a strong 57.1% market share. The market has also seen a growing influx of new players offering quicker delivery services, including companies like Zepto, Blinkit (owned by Zomato), and standalone startups like Accel-backed Swish.
Zomato and Swiggy’s recent ventures into 10-minute food delivery services have sparked a backlash from restaurant owners, many of whom are represented by the National Restaurants Association of India (NRAI). The NRAI is calling for a third player to break the duopoly and provide an alternative to the existing delivery giants. Rapido, with its large fleet of two-wheelers, could seize this opportunity to step into the void and offer an alternative model that addresses the concerns of restaurant owners and customers alike.
Rapido’s focus on hyperlocal deliveries via its existing infrastructure gives it a strategic advantage in the growing quick commerce sector. With the increasing demand for fast and reliable services, Rapido’s ability to leverage its two-wheeler fleet for food delivery could prove to be a game-changer.
What Undercode Says:
Rapido’s foray into food delivery could be a major disruptor in the Indian market, especially considering the existing pain points surrounding commission structures and the dominance of Zomato and Swiggy. The food delivery sector is currently facing a slowdown, but the emergence of new players like Zepto and Blinkit has added more competition, challenging the long-standing duopoly.
Rapido is well-positioned to enter this space, thanks to its established infrastructure and experience with deliveries in urban areas. The company’s fleet of two-wheelers can be quickly repurposed for food delivery, giving it the flexibility to scale up rapidly. Additionally, its ability to offer competitive pricing could appeal to both consumers and restaurant owners looking for alternatives to Zomato and Swiggy’s fee structures.
Another important factor is the growing demand for 10-minute food delivery. Rapido could capitalize on this trend, as its existing fleet allows for rapid delivery in urban areas. Moreover, by offering a more restaurant-friendly commission structure, Rapido could potentially attract a significant number of restaurants who are unhappy with the current state of the market.
However, challenges remain. Zomato and Swiggy have deep market penetration, vast resources, and brand recognition. Rapido will need to come up with a business model that not only attracts customers but also addresses the concerns of restaurant owners, particularly regarding commission rates and service charges. The company’s ability to innovate and differentiate itself will determine its success in this competitive space.
Fact Checker Results:
- Rapido’s potential entry into food delivery is a strategic move to diversify its services.
- Zomato holds a dominant market share of 57.1% in the food delivery space, which Rapido aims to challenge.
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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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