A look at India's food delivery market, where the prospect of continued cash-burn is forcing market leaders Swiggy and Zomato to explore other business areas
Financial Times : Tweets: @financialtimes Tweets: @financialtimes : Having muscled out their competitors, Zomato and Swiggy together account for around four-fifths of the market and claim to be in some 500 Indian cities each https://www.ft.com/...
Context & Ripple Effects
Zomato and Swiggy have spent years buying their way to a near-duopoly — together around four-fifths of Indian food delivery, present in some 500 cities each — but the coverage shows the model has never stopped bleeding: restaurants have long chafed at steep commissions and discount pressure, and a state-backed alternative in ONDC failed to break the pair's grip once discounts were cut.
The strategic answer is adjacency. Both companies have already pushed into quick commerce, and across the sector players like Zepto and Flipkart are now pulling back on dark-store expansion to control cash burn — which is why the duopoly is hunting for business lines beyond the core delivery market rather than deeper subsidy wars in it.
First-order effects
- Swiggy and Zomato redirect capital from discounting toward new verticals like quick commerce, easing the direct price war between them but stretching each company's management and balance sheet across more fronts.
Second-order effects
- Restaurants gain modest leverage as the platforms' attention shifts away from subsidised food delivery, though with ONDC stalled they still lack a credible alternative channel to the two incumbents.
Third-order effects
- If cash-burn discipline holds across the sector, Indian on-demand delivery consolidates into a two-firm ecosystem spanning groceries and meals, where competition happens through adjacent categories rather than price.
The trend: India's food delivery duopoly is diversifying into adjacent categories because the core delivery economics cannot sustain continued cash-burn.