Rapido's Food-Delivery Entry Can Dent Market Share Of Zomato, Swiggy: Elara Capital's Karan Taurani
The analyst sees limited near-term impact, but a 10–12% market-share gain by Rapido can hit revenue and valuation of Swiggy and Zomato.
Ride-hailing platform Rapido is making a grand disruptive entry into the food delivery space, taking direct aim at Swiggy Ltd. and Zomato operator Eternal Ltd.
Rapido's new direct-to-consumer platform, which is test-piloting in Bengaluru, is designed to bypass traditional aggregator models that rely heavily on commissions and platform fees.
According to Karan Taurani from Elara Capital, Rapido has two critical advantages: an existing delivery fleet and access to capital. "They have the last mile sorted, so customer experience can be on par with Swiggy. They also have the capital to invest in technology and promotions," Taurani told NDTV Profit.
A detailed comparison of a McChicken meal order—researched and calculated by NDTV Profit—underscores Rapido’s low-cost strategy:
Rapido’s zero-commission approach and no packaging fees mean partner restaurants pay only delivery costs — either through Rapido's delivery partners or their own staff at zero extra cost. Customers pay no platform fees, no packaging fees and only the applicable GST.
Taurani noted that while Rapido's initial market-share impact will be limited, a potential 10–12% market-share gain could dent the revenue and valuation multiples of incumbents Swiggy and Zomato. "If Rapido executes well, we could see a 4–5% downside in target prices for these stocks in the near term," he said.
He also highlighted that the ability of Swiggy and Zomato to sustain deep discounts is constrained by their profitability focus. "Rapido has the room to burn cash, but for Swiggy and Zomato, cash burn would be more limited, given their valuation sensitivities," Taurani said.
As Rapido prepares to launch its pilot in July, industry watchers are keeping a close eye on whether this cost-cutting model can scale and disrupt the carefully built duopoly of Swiggy and Zomato.
For now, Taurani advises caution: "There's no proof of concept that Rapido will execute well in the food delivery segment, but it's definitely a development worth watching closely."
