The Next Billion Dollar Company in the Quick food delivery industry in India.
India’s food delivery market has long been a two-horse race between Zomato and Swiggy. Together, they dominate over 95% of the sector, backed by massive funding, deep logistics networks, and loyal urban consumers. However, new challengers are emerging—Rapido, Zepto, and even localised startups—aiming to disrupt this duopoly. But do they have a future in this fiercely competitive industry?
The Market Landscape: A Quick Overview
According to Redseer’s 2025 Q1 report, the Indian food delivery sector is projected to cross $20 billion in GMV by FY26, driven by increasing digital penetration, fast urbanisation, and rising disposable incomes.
- Zomato commands ~55% market share, having recently turned profitable.
- Swiggy, while still in the red, is banking heavily on its grocery vertical Instamart.
- Rapido, which began as a bike taxi service, re-entered the food delivery space in 2023 through Rapido Store, focusing on Tier 2 and Tier 3 cities.
Tier 2 Cities with High Growth Opportunity:
| City | Why It Matters |
|---|---|
| Indore | Cleanest city, growing IT sector, strong student base |
| Lucknow | Capital with rising tech jobs, demand for convenience |
| Jaipur | Tourist + local markets, underserved neighborhoods |
| Nagpur | Central India logistics hub, food-savvy population |
| Coimbatore | Industrial hub with strong middle class, low competition |
| Chandigarh | High per capita income, strong café culture |
| Visakhapatnam | Growing IT and port-driven economy, minimal food apps |
| Vadodara | Large student and working youth demographic |
Tier 3 & Emerging Cities with Untapped Potential:
| City | Why It’s Ideal for Disruption |
|---|---|
| Guntur | High density with limited food app coverage |
| Kurnool | Regional importance, demand for budget food options |
| Jamnagar | Industrial growth, but low delivery ecosystem |
| Siliguri | Gateway to Northeast, regional logistics base |
| Muzaffarpur | High population, aspirational users, low pricing models |
| Raipur | Fastest growing Chhattisgarh city, few big players |
| Tirunelveli | Youth-driven growth with increasing online habits |
| Kozhikode | Educated user base, local cuisine diversity |
Rapido’s Gameplan: Small Cities, Fast Deliveries
Rapido is taking a hyperlocal, asset-light approach. Instead of competing head-on with Zomato or Swiggy in metros, Rapido is targeting underserved towns like Coimbatore, Nashik, Guntur, and Indore, where major players have thinner margins and weaker networks.
Key Differentiators:
- Two-wheeler fleet: Cheaper and faster for short-distance delivery.
- Lower commission rates: Attracts small local eateries.
- Focus on affordability: Ideal for cost-sensitive non-metro users.
“There’s a growing appetite for delivery services in smaller towns. We’re building for the next 200 million users,” said Arvind Sanka, co-founder of Rapido.
🆚 The Challenge of Breaking the Duopoly
Despite the opportunity, cracking this market isn’t easy.
Entry Barriers:
- High logistics cost in scaling up fast delivery networks.
- Customer loyalty heavily tilted toward Zomato Gold or Swiggy One.
- Restaurant onboarding is harder where legacy players offer higher visibility.
Yet, Rapido and similar entrants benefit from agility, frugality, and regional trust.
🧠 What Startups Need to Succeed
To survive and thrive in India’s delivery economy, new players must focus on:
- Niche Positioning: Serve unique customer segments—rural youth, college students, etc.
- Partnerships: Collaborate with hyperlocal kirana stores and cloud kitchens.
- Tech Integration: Use AI for routing, dynamic pricing, and customer retention.
- Diversification: Include pharmacy, grocery, or D2C product delivery to improve margins.
🔮 The Future Outlook
Experts believe the next growth wave in India’s food-tech space will come from smaller towns and vernacular platforms. Players like Rapido, DotPe, and Magicpin could fill this gap by offering localised services and affordable pricing.
“India is not one homogenous market. There’s space for specialised players in non-metros who understand regional eating habits, languages, and logistics,” said Ankur Pahwa, Partner at EY India.
📝 Conclusion
While Zomato and Swiggy remain dominant, their future growth will likely slow in urban metros due to saturation. This opens a strategic window for newer entrants like Rapido, who are focusing on value-driven, regional strategies.
With the right mix of tech, partnerships, and patience, Rapido and similar startups could redefine how India eats—especially beyond the big cities.
