India’s food delivery market is no longer just about Zomato and Swiggy. A new player, Rapido, is getting ready to shake things up. This could change how millions of Indians order food online.
Zomato, now called Eternal, and Swiggy have been the main players in India’s food delivery space. Their share prices have recovered since June, after news broke that Rapido was entering the game. But the storm is far from over.
Rapido started as a bike taxi company ten years ago. Since then, it has grown fast. Today, it holds a large part of India’s bike and auto-rickshaw market. According to Motilal Oswal, Rapido controls 33% of three-wheelers and nearly 20% of four-wheeler rides. Now, it’s turning its eyes toward food delivery.
The big change? Rapido plans to charge much lower fees from restaurants—only 8% to 15%. In comparison, Eternal and Swiggy charge 24.4% and 21.9%, respectively. These fees are called “take rates.” It’s the money these platforms make on every order, either from restaurants or customers.
For a price-sensitive country like India, this matters. Global players like Meituan in China charge just 16.1%. India’s high take rates could be the reason why the industry’s growth is slowing down.
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Look at Eternal. Food delivery is its biggest business, making up 38% of its revenue. But growth is stalling. In the March quarter, gross order value rose only 16%. The previous quarter was just 17%. That’s below their 20% target.
Eternal makes a profit on each order thanks to its high take rates. But if it had to match Meituan’s 16.1%, it could lose up to one-third of its delivery income. That would hurt its other parts of the business, like quick commerce, which still lose money.
Rapido, meanwhile, is ready to play the long game. It’s already profitable (on EBITDA), and its network of 4 million riders gives it a huge advantage. It plans to deliver food during non-peak ride hours. Smart move.
Interestingly, Swiggy holds a 13% stake in Rapido. So if Rapido succeeds, Swiggy still gains something. Both companies also share a common investor—Dutch firm Prosus.
Still, competition is heating up. At a recent investor event, the first question Swiggy’s CEO faced was about Rapido. That says everything.
India’s food delivery scene is changing fast. High take rates won’t last forever. With Rapido entering the space, the market is set for a bold, spicy fight.
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