Flipkart, the Indian e-commerce giant owned by Walmart, is gearing up to challenge the dominance of Zomato and Swiggy in India's burgeoning food-delivery market. The company has begun testing its new service internally, expanding from a few hundred employees to over 8,000, as it prepares for a public launch.
Based in Bengaluru, Flipkart is leveraging its logistics arm, Ekart, to deploy a dedicated fleet of riders for this venture. This fleet operates separately from the riders handling its quick-commerce deliveries. The service, currently available only to employees, appears as a separate tab on Flipkart's main shopping app, alongside its existing offerings like Minutes quick-commerce and travel bookings.
The food-delivery service draws from restaurants listed through the government-backed ONDC network, as well as those Flipkart has signed up directly. Riders, identifiable by their “Eat-in by Minutes” jerseys, have already started fulfilling orders in Bengaluru, the company’s headquarters.
India's food-delivery market is growing rapidly, with an estimated annual growth rate of 18% to 20%. Despite this growth, online delivery accounts for just over 15% of the broader food-services industry. Zomato and Swiggy currently dominate the market, serving between 85 million and 95 million paying customers each year, according to brokerage firm Bernstein.
Flipkart is not alone in its quest to disrupt the market. Ride-hailing company Rapido has been expanding its Ownly service, which charges zero commission to restaurants. Meanwhile, Swiggy has launched Toing, a separate app targeting customers seeking cheaper meals. These moves highlight the pressure on the industry’s pricing model and the commissions restaurants pay.
Sagar Daryani, president of the National Restaurant Association of India, which represents over 500,000 restaurants, expressed the need for alternatives to the dominant platforms. He noted that Flipkart's entry could bring down the cost of selling meals online. Flipkart has proposed a base commission of about 10%, significantly lower than the 20% to 25% typically charged by Zomato and Swiggy.
However, the challenge remains in attracting customers. Bernstein estimates that new entrants could save customers only ₹20 to ₹30 per order through more efficient operations, a saving that might not be enough to lure them away from established players. Zomato and Swiggy could also counter with deeper discounts.
Flipkart plans to expand beyond Bengaluru soon. The company has informed restaurants of its intention to launch the service publicly soon and to expand to five or six cities by the end of the year. This expansion comes as Flipkart's long-awaited stock-market listing remains uncertain, with CEO Kalyan Krishnamurthy declining to provide a timeline for an IPO.
The move into food delivery aligns with Flipkart's strategy to increase customer engagement on its app. As competition in India's e-commerce market intensifies, with quick-commerce platforms now selling a wide range of products, Flipkart is looking to diversify its offerings and capture a larger share of the market.
