Eternal, Swiggy stocks slide as Rapido shakes up food delivery
What's the story
Shares of Swiggy fell 2.7% and Eternal Ltd, the parent company of Zomato, fell 1% on Monday.
The dip came after news that Rapido is planning to launch a food delivery pilot in Bengaluru by the end of this month with nearly half the commission rates of industry players.
According to CNBC-TV18, Rapido has already started onboarding restaurants for this new venture.
Market disruption
Rapido's pricing strategy
Rapido's entry into the food delivery space could disrupt the market with its aggressive pricing strategy.
The company is offering a flat rate of ₹25 on orders below ₹400 and ₹50 on those above that mark, which translates to a commission rate of 8% to 15%.
This is significantly lower than Swiggy and Zomato's commission rates that range between 15% to 30% of the total order size.
Restaurant partnerships
What else is the company offering restaurants?
Rapido is also asking restaurants to price their items at ₹150 per item, in a bid to drive more orders.
The company has said that discounts will be limited and only those as agreed upon with the restaurants.
This strategy could further make it difficult for Swiggy and Zomato to compete in the Bengaluru market where food delivery services are already highly competitive.