Rapido enters food delivery: Unlikely to dent duopoly, say brokerages

Rapido's foray into nutrient transportation done a aviator successful Bengaluru is improbable to materially disrupt the entrenched duopoly of Zomato and Swiggy, aggregate brokerages said successful abstracted notes, citing the operational complexity, superior strength and lawsuit acquisition challenges inherent to the business.TOI reported connected Monday, Bengaluru-based Rapido is presently preparing to motorboat its nutrient transportation work with a fundamentally antithetic pricing structure, choosing level fees implicit accepted percent commissions charged to restaurants. The determination positioned the ride-hailing steadfast arsenic a challenger to Zomato and Swiggy astatine a clip erstwhile tiny edifice owners are progressively vocal astir rising aggregator costs.Rapido plans to complaint a fixed Rs 25 connected nutrient orders beneath Rs 400 and Rs 50 for those above. These charges are level fees deducted from the bid value, paid by the edifice to Rapido. Bernstein’s Rahul Malhotra noted that portion Rapido plans to leverage its implicit 3 cardinal rider basal and complaint little instrumentality rates, “new entrants person been unsuccessful successful the past.” Malhotra cited anterior attempts by Amazon, Ola and ONDC that failed to standard owed to constricted edifice selection, fragmented supply, and anemic lawsuit experience.

He added that India's nutrient transportation market, dominated by Zomato and Swiggy with 54% and 46% marketplace shares respectively, has go operationally analyzable with implicit 200,000 to 300,000 restaurants, posing precocious barriers to standard for caller players.Elara Capital’s Karan Taurani acknowledged Rapido's cross-utilisation model, wherever its rider web whitethorn trim incremental superior expenditure. However, Taurani warned that “the lack of a dedicated fleet whitethorn compromise the transportation experience, particularly with rising sub-30 infinitesimal transportation expectations.”

Elara’s sensitivity investigation suggested that adjacent a mean interaction from Rapido could pb to a 6% chopped successful the people terms of Eternal (Zomato), should gross maturation oregon valuation multiples weaken owed to pricing pressures.HSBC analysts Yogesh Aggarwal, Prateek Maheshwari and Sagar Desai pointed retired that portion the underlying outgo structures of two-wheeler ride-sharing and nutrient transportation are similar, scaling nutrient transportation demands sustained execution.

They argued that "customer experience, quality to execute, and achieving standard stay cardinal challenges" for Rapido. The analysts besides flagged that semipermanent manufacture maturation is already moderating, with astir of the incremental request expected to travel from higher bid frequencies alternatively than important lawsuit basal expansion.Kotak Institutional Equities, successful its assemblage alert, described Rapido’s introduction arsenic having “no contiguous impact” connected the incumbents. It reiterated that Zomato and Swiggy person built important operational moats successful logistics, lawsuit loyalty, and dense edifice partnerships, making worldly stock shifts improbable successful the adjacent term.