Swiggy, Zomato Parent Eternal Decline As Rapido Sets Stage To Enter Food Delivery Business

Shares of food delivery aggregator Swiggy Ltd. and Zomato's parent, Eternal Ltd., fell on Monday. Rapido's push for entering the food delivery space has taken one more step forward.

The cab aggregator has fixed a delivery fees model with potential partners, people directly aware of the matter told NDTV Profit. Rapido and restaurants have agreed on a fixed fee model, where restaurants will be paying a flat Rs 25 on every order of up to Rs 400 in value, and for orders over Rs 400, Rapido will charge Rs 50 for every delivery.

Restaurant partners will show up on the Rapido app, and food orders will also be placed on the platform, the abovementioned people added.

Rapido's proposed model of a flat delivery fee for food delivery is different from the commission-based models that aggregators like Swiggy Ltd. and Eternal Ltd.-owned Zomato use.

Rapido's foray into the D2C delivery space comes at a time when Zomato and Swiggy have a comfortable duopoly in the market. Restaurants, however, are raising concerns over commission models and margins, which is what Rapido's strategy seems to be focusing on.

Rapido is expected to launch the delivery fees model as part of their pilot project in Bengaluru from July.

The shares of Swiggy fell as much as 4% to Rs 360.10, and Eternal fell over 1% to Rs 257.95.

While Eternal has risen 40.38% in the last 12 months, it has fallen 7.18% year-to-date. On the other hand, Swiggy is down 32.56% year-to-date and 20% since its listing.