The possible acquisition of Uber Eats by Bengaluru-based food delivery company Swiggy is expected to lead to consolidation in the food delivery market with only a few major players left in the arena competing with one another.
Experts with whom THE WEEK spoke to feel that this acquisition move by Swiggy will further establish the fact that the food delivery market has arrived in India with more and more Indians accepting the trend and ordering food through these food delivery companies. Though most of the food delivery companies are running in losses despite an increase in their revenue, such an acquisition will further intensify the competition in the market.
When contacted by THE WEEK, the Swiggy spokesperson did not confirm the move and stated that the company does not want to comment on market rumours or speculations.
“The acquisition of Uber Eats is a positive sign and it establishes the fact that more and more customers are ordering food through the food delivery companies. It has also established the food ordering and delivery category as a successful and well-established category in India. This was not the case earlier as the market was in a very nascent stage. At the same time, it is also a good time to exit the market. Uber Eats had a very short stint in the Indian market but is expected to benefit from this acquisition,” Alok Shende of the Mumbai based Ascentius Consulting told THE WEEK.
Murthy B.S., the CEO of Bengaluru-based firm LeadershipCapital, feels that Uber Eats failed to make an impact in the Indian market and it seems that the company wanted to exit this business by getting acquired. “In the food delivery category, Swiggy, Foodpanda and Zomato are the main competitors and all of them are well funded. The food delivery category will further expand with more and more restaurants coming and tying up with these players as they are facing challenges of getting more customers. If a restaurant is on the main road then it will attract customers, but if the restaurant is inside, many of them depend on these food delivery companies to deliver their food items. Also the high rentals and manpower costs are eating into the profits of these restaurants hence they are dependent on these food delivery companies for extra business. Many of these food delivery companies also rate many of these restaurants based on the quality of their food which also attracts more customers to them,” remarked Murthy.
