Just when it seemed like India’s food delivery market had settled into a stable duopoly between Zomato and Swiggy, bike-taxi giant Rapido has crashed the party — and it's not just testing the waters, it's diving in with disruption on its mind.
The startup’s surprise move into food delivery, combined with an aggressive low-commission strategy, has rattled investors and could force the incumbents to rethink long-held pricing models.
💸 A Pricing War Begins?
Rapido is charging restaurants a flat commission between 8–15%, nearly half of the 21–22% typically taken by Swiggy and Zomato. This undercutting model threatens to:
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Attract more restaurant partners
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Boost delivery partner earnings
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Lower end-user delivery costs
This trifecta could offer Rapido a significant edge — especially in price-sensitive Tier 2 and Tier 3 markets — and put pressure on the margins of established players.
📉 Market Reaction: Swiggy & Eternal Take a Hit
Investor sentiment has already taken a hit. Shares of Swiggy’s listed parent, Eternal, fell 2–3% in the previous session and slid another 1% today as the market digested the implications of this sudden competition.
🧮 Analyst View: Profitability Under Threat
According to Karan Taurani of Elara Capital, Rapido’s entry could destabilize the profitability metrics that Swiggy and Zomato have worked years to solidify.
“Even without a dedicated delivery fleet, Rapido’s growing user base and lower commission model pose a serious threat,” Taurani noted. “It could upset the current equilibrium built on premium take-rates and narrow but stable EBITDA margins.”
Elara’s own model shows that just a 200 bps dip in revenue growth or a 10% decline in Eternal’s valuation multiple could drop the stock’s target price from ₹300 to ₹282 — a tangible warning sign for investors.
🏁 What’s Next?
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Rapido’s scale-up speed will be critical. If it manages to offer reliable delivery without compromising user experience, it could dent the market share of both Zomato and Swiggy.
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On the flip side, the incumbents may slash commissions or launch loyalty programs to defend their turf.
📌 Bottom Line
Rapido isn’t just entering food delivery — it’s declaring open war on established players. If it sustains this pricing model and scales up efficiently, the Indian food delivery space may witness a new phase of cutthroat competition — and investors in Zomato and Eternal might need to brace for a long, bumpy ride.
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