New competitors Flipkart and Ownly are entering India’s food delivery market with lower commission fees, aiming to attract restaurants currently paying 16-30% to incumbents. This shift could force Swiggy and Zomato to adjust their merchant incentive programs to defend their market share in key cities like Bengaluru.
The competitive landscape of India’s food delivery sector is undergoing a notable change as new players prepare to challenge the long-standing dominance of Swiggy and Zomato. Flipkart is expected to launch its food delivery service in Bengaluru by mid-August, leveraging the government-backed Open Network for Digital Commerce (ONDC) to build its presence. Meanwhile, the startup Ownly, supported by the mobility platform Rapido, has already begun operations using a zero-commission model for restaurant partners.
Impact on Merchant Commissions
For years, restaurant partners have voiced concerns over the high commission rates charged by the two market leaders, which typically range from 16% to 30%. These fees are a primary revenue source for the incumbents but have also been a point of friction with merchants. By offering significantly lower costs—with Flipkart reportedly planning commissions around 10% and Ownly operating on a zero-commission basis—these new entrants are attempting to build an alternative business model that prioritizes merchant acquisition.
Market Dynamics and Growth
Ownly has seen early traction in Bengaluru, reaching approximately 40,000 daily orders and onboarding nearly 25,000 restaurants in a short period. This rapid entry has reportedly helped the platform secure an estimated 7-10% share of the Bengaluru market. While Flipkart’s strategy utilizes the infrastructure of the ONDC to integrate its user experience, the success of both platforms will depend on their ability to scale these operations effectively while managing the logistics of food delivery.
Challenges for Incumbents
This entry creates pressure on Swiggy and Zomato to rethink their merchant incentive programs and pricing strategies. Historically, the food delivery market in India has seen limited competition, keeping market shares relatively stable. With new players now actively competing for restaurant partnerships, the sector may see a shift in how these companies balance profitability with the need to retain their restaurant base.
Investors should monitor how the incumbents respond to this pricing pressure and whether the new entrants can expand their reach beyond initial pilot programs without relying on heavy cash-burning tactics. The primary question for the sector remains whether these platforms will successfully bring new customers into the food delivery ecosystem or if they will primarily shift existing orders away from current market leaders. Future updates will likely focus on the expansion timelines for Flipkart’s ONDC-based service and the long-term sustainability of the low-commission models introduced by newer competitors.