Yet another e-commerce business succumbs after deep discounting

Yet another business gets hit by deep discounting! Clearly, this strategy can help penetrate and acquire market share only as long the wallet stretches. Uber Eats was no exception to this; even two attempts in this space by Ola (namely, Ola Café and Food Panda) were unsuccessful, with the latter moving to cloud kitchen services, after realizing the restricted penetration potential in the food delivery business. With a customer base that remains loyal only to discounts, stiff competition, and lack of service differentiation, the food delivery industry seems on its way to reaching the last ones standing and driving out smaller players.

While operational costs are ever-surging (due to increasing discounts, high cost of customer acquisition, time and incentive cost of onboarding an extensive network of restaurants, high investment in the delivery fleet), the revenues are nowhere near reaching any profitability. With the all-equity deal of Uber Eats with Zomato (where Uber obtained a 9.9% stake in Zomato for the entire Uber Eats business), Zomato and Swiggy are the two largest players still standing in the Food Delivery business.