Sunny Sen 21 January 2020, 1:52:21 p.m. IST
The battle for a larger share in the South Indian online food ordering room just got even fiercer.
With Zomato With the takeover of UberEats the company headquartered in Gurgaon will finally be present in the south, a market that was founded by Swiggy in Bangalore is dominated. Zomato announced on January 21
“(The Deal) wasn't about market expansion… it was about market consolidation,” said a Zomato manager on condition of anonymity. "The deal makes us the clear market leader in the field of food delivery."
The deal, which the Economic Times fixes for $ 350 million is worth Zomato at $ 3.5 billion.
Both Swiggy and Zomato are represented in 550 cities, but their markets are different.
Zomato is strong in The North, which accounts for almost 70 percent of the 36 million orders he receives in a month, company sources say. It is the reverse for Swiggy with the South contributing approximately 70 percent of the 42-45 million orders it processes in a month.
65 percent of UberEats & # 39; 10 million orders came from the south. Taken together UberEats and Zomato the number for southern India can increase to around 14 to 15 million orders per month. According to a second source, UberEats had 30 percent of the market share in the south, followed by Swiggy who dominated the market with 55-60 percent. Zomato was a distant third.
The competition in the Indian online food shipping room is growing with the growth of the market. According to DataLabs from Inc42, the market will be worth $ 12.53 billion by 2023. UberEats will give more power to the struggle of Zomato .
Lunch and dinner made the majority of Zomato's orders from snack segments, said the Zomato executive. And South India loves its breakfast, especially when ordered online.
"The deal creates a duopoly on the market and the competition will take place between Zomato and Swiggy Now that Zomato is moving to the south", said Sanchit Vir Gogia, chief analyst and founder of Greyhound Research.
Without taking customer overlaps into account, the UberEats deal clearly presumes Zomato . The nationwide order volume of Zomato and UberEats will be 46-47 million, for Swiggy 42-45 million.
When sales talks with UberEats began, Swiggy was in the running. "But they asked for an unrealistic price, so we decided to expand alone," said a Swiggy executive on condition of anonymity.
Swiggy increased its presence in South India to expand its price, the reason why it eyed UberEats . "This advantage is now lost," said the Swiggy executive. “The deal will not affect our market share position. There are overlapping users for UberEats and Zomato . “
It remains to be seen who will lead the lucrative but highly competitive space for food delivery, but Satish Meena, a senior analyst at Forrester Research, said that Swiggy despite Zomato Bagging UberEats would continue to be a leader.
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