Flipkart Prepares Challenge to Zomato and Swiggy in India's Food Delivery Market
Walmart-owned Indian e-commerce company Flipkart is testing a food delivery service internally and plans a public launch by the end of October. It would enter a market dominated by Zomato and Swiggy, where Amazon and Google have previously failed.
Flipkart, the Indian e-commerce giant owned by US retailer Walmart, is preparing to enter a food delivery market controlled by two companies in India: Zomato and Swiggy. The Bengaluru-based company is testing the service internally, and two people familiar with the matter told TechCrunch the trial has grown from a few hundred employees to more than 8,000.
How the trial works
The service appears to employees as a separate tab in Flipkart's main shopping app, next to its Minutes quick-commerce offering and travel bookings. It lists restaurants from ONDC, a government-backed network linking online buyers and sellers across platforms, as well as restaurants Flipkart signed directly. Riders in "Eat-in by Minutes" jerseys are already fulfilling orders on Bengaluru's streets, and they belong to a dedicated fleet set up through Ekart, the company's logistics arm.
Market conditions
Brokerage firm Bernstein estimates India's food delivery market is growing 18% to 20% a year, though online delivery still makes up just over 15% of the broader food-services industry. Zomato, owned by Eternal, and Swiggy together serve an estimated 85 million to 95 million paying customers annually.
Other players are also pressing the existing model. Ride-hailing firm Rapido is expanding Ownly, a food service charging restaurants no commission, while Swiggy has launched Toing, an app for cheaper meals. Amazon started food ordering in Bengaluru in 2020 and closed it two years later, Google's Areo app failed to gain traction, and Uber sold its Indian Uber Eats business to Zomato in 2020.
What restaurants hope for
Sagar Daryani, president of the National Restaurant Association of India, says Flipkart has proposed a base commission of about 10%, versus the 20% to 25% typically paid to Zomato and Swiggy. Counting advertising, discounts and other promotions, restaurants can spend 40% to 50% of an order's value on the incumbents, while he expects Flipkart to keep the total near 15% to 16%.
Bernstein, however, estimates newcomers could save customers only ₹20 to ₹30 per order, which may not be enough to switch them over. Flipkart has told restaurants it expects a public launch by the end of October and operations in five or six cities by year-end. The company did not respond to a request for comment.
