Rapido enters food delivery business to challenge Swiggy and Zomato

Trip-hailing firm Rapido has entered the meals supply market with the launch of a brand new zero-commission platform referred to as Ownly in a transfer that seeks to disrupt the duopoly of Swiggy and Zomato within the nation’s fast-growing on-line ordering area.

The Bengaluru-based start-up, which reportedly facilitates 4 million rides every day throughout 500 cities and serves 30 million month-to-month lively customers, is positioning Ownly as a clear, cost-efficient various to dominant gamers that usually cost eating places between 15 per cent and 25 per cent fee on each order.

Citing a communication shared with restaurant companions, Hindu Businessline reported that the corporate stated, “We’re a zero fee platform that believes in sincere pricing – offline worth equals on-line worth.”  

Not like its rivals, Rapido’s new enterprise won’t impose fee charges, nor will it cost packaging or platform charges to prospects, other than statutory taxes.

Cross-subsidised supply mannequin targets affordability

Ownly’s pricing mannequin shifts the monetary burden of supply away from eating places. For orders beneath Rs 400, eating places pays a Rs 25 supply price, and for higher-value orders, Rs 50. Nonetheless, sources acquainted with the corporate’s pricing plan say Rapido is cross-subsidising supply prices to maintain the service inexpensive for patrons.

In follow, eating places pay as little as Rs 10 on orders beneath Rs 100, whereas prospects are charged Rs 20. For orders above Rs 100, eating places pay a flat Rs 25 price plus relevant GST, with Rapido absorbing the remaining prices.

The corporate plans to introduce a set subscription mannequin for eating places as soon as it achieves scale, whereas sustaining its dedication to zero commissions.

“Structurally, we hope to deliver supply prices down throughout the trade,” Rapido stated in a observe to companions. The platform has requested eating places to listing a minimum of 4 meals priced beneath Rs 150 in an effort to maintain the platform accessible to price-sensitive customers.

Restaurant visibility and aggressive edge

In an additional departure from trade norms, Rapido is promising “earned visibility” based mostly on buyer rankings, not paid promotions or reductions. This mannequin, the corporate argues, will higher reward high quality and buyer satisfaction, slightly than promoting budgets.

Some Trade observers consider the brand new enterprise has the potential to reshape India’s on-line meals supply ecosystem. “This might deliver a few disruption out there which is presently dominated by Swiggy and Zomato,” stated an trade stakeholder acquainted with Rapido’s plans, quoted by The Hindu.

Nonetheless, scepticism stays. In a current analysis observe, analysts at Bernstein identified that earlier makes an attempt by Amazon, Ola, and government-backed ONDC to interrupt into the phase failed to achieve significant traction. These efforts struggled with inconsistent buyer expertise, restricted restaurant availability, and challenges associated to India’s fragmented provide chains.

HSBC analysts echoed related considerations in a separate report, noting that whereas there are value parallels between two-wheeler ride-sharing and meals supply, sustaining person expertise and scaling up operations will stay main obstacles, in line with a report by Moneycontrol.

Funding and strategic targets

The launch of Ownly coincides with Rapido’s newest funding spherical, which is predicted to lift Rs 125 crore (roughly $15 million) from Nexus Ventures as a part of its Collection E. The extra capital may assist subsidise early supply prices and fund buyer acquisition in a extremely aggressive market.

The zero-commission mannequin might resonate with smaller restaurant operators and cloud kitchens who’ve lengthy protested the excessive charges levied by Swiggy and Zomato.

Nonetheless, Rapido’s success within the area will hinge on its skill to draw a big person base, provide constant supply service, and preserve monetary sustainability with out the fee income stream that underpins its rivals.