Zomato Acquired UberEats arnd Is Now all Set to Be the Market Leade

Zomato Acquired Uber Eats and Is Now all Set to Be the Undisputed Market Leader

3181 Views | 3 min | January 21, 2020
Food Delivery App

When it comes to food-delivery apps, the first two names that pop in our mind are Uber Eats and Zomato. While UberEats is owned by the ride-hailing giant Uber, Zomato’s roots come from India.

There is a lot of content on the internet that compares the two of them to find out which one is best. But, what if we say that competition is now over? Yes, at least in India. 

Now, when UberEats users in India open the app, this is what they get:

Food Delivery App Zomato

As per the recent reports, food delivery and restaurant finder app Zomato has purchased the operations of UberEats in India, the food delivery app founded and maintained by Uber, for around Rs 2,485 crores. Here are some important announcements of the deal:

  • In their official blog post, Zomato said the deal gives Uber a 9.99% ownership in Zomato.
  • Zomato will whole-heartedly welcome the Users and Delivery Personnel of UberEats in India.

Neither company revealed the financial details of the deal. But, as per the researchers, the amount that Zomato paid to acquire UberEats is $350 million and with it, Zomato became the undisputed market leader in the food-delivery business. Let’s see how this will impact the food-delivery industry in India.

How This Acquisition Will Affect India’s Food Delivery Industry?

Presently, India’s food delivery market is experiencing robust growth. The market’s growth in India has been basically driven by expanding incomes, urbanization and changing lifestyles of the users.

Zomato’s take over on UberEats absolutely implies the development of consolidation in India’s online food delivery industry. Here is how the deal will impact the entire industry:

1. Zomato Will Now Own 50% Shares in India’s Food Delivery Market

Uber selling UberEats to Zomato is an indication of consolidation which happens commonly to accomplish leadership after companies achieving sizable aggregation. Zomato now has over half of the shares in the food-delivery market with this deal. The delivery network of UberEats will profit Zomato in developing its market share in South India and henceforth contend all the more savagely with Swiggy across the nation.

Another factor that is setting off this consolidation is the unsustainability of the delivery business for Uber and Ola.

Both ride-hailing leaders had entered India’s food delivery industry in late 2017 with the hope to win the market. However, with UberEats going wiped out in India and Ola downsizing its food delivery business, this expectation has failed.

While Swiggy is a bit ahead of Zomato in the food delivery business, Zomato coming on board along with UberEats will without a doubt give it more capability to stake on Swiggy as its new entity will automatically capture 50-55% market of food delivery.

Therefore, at present, India’s food delivery industry has been united into a race among Swiggy and Zomato where the odds of Zomato being a winner are more. However, the industry is completely unpredictable and we can not exactly say what will happen to these food-delivery giants going ahead.

Zomato’s business model and its amazing strategies to acquire and retain its users is the reason behind its leadership in the food-delivery industry. Want to know “How Zomato works”? Check out our blog on Zomato Business Model.

2. Food-Delivery Market Is Now All About Scaling and Being Profitable

UberEats barely managed to match up to its competitors in the market. While Swiggy and Zomato were getting around 2-2.5 million orders each day, UberEats could just manage to get 2,50,000-3,00,000 orders. That means it wasn’t scaling and being profitable is a dream so far in such a scenario.

Uber, in an official statement, uncovered that they were finding it hard to sustain their food delivery business in India because of less number of orders on their platform and low revenue. But, India still remains a very important market for Uber and the organization would concentrate on the ride business.

Let’s have a look at the views of CEOs of both the organizations:

Deepinder Goyal, founder, and CEO of Zomato said –

“We are extremely proud to create a leading food delivery business in India which is currently operating in more than 500 cities. The acquisition of UberEats significantly strengthens our position in the food-delivery industry.”

Zomato Acquires UberEats

Dara Khosrowshahi, the CEO of Uber said –

“Our UberEats team in India has accomplished a mind-boggling amount in the recent two years, and I couldn’t be prouder of their commitment and ingenuity. India stays an outstandingly important market to Uber and we will keep on putting resources into developing our local Rides business, which is as of now the clear category leader. We have been very much impressed by Zomato’s capacity to grow quickly in a capital-effective way and we wish them great success.”

Leaving the food-delivery business will now let Uber concentrate on its main ride-hailing business where it is again facing furious competition from Ola.

Wrapping Up

Zomato became a successful food delivery business in next to no time and has taken control over the entire industry. A number of new entrants came in the market but nobody was able to beat Zomato because of its strong business model. Surely, it was not a cakewalk for the business and new entrants need to learn this thing. If you are planning to build an app like Zomato, here is a guide for you on Food Delivery App Development.

Zomato acquires UberEats

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