I feel our online food ordering industry has grown artificially and will fail in the coming years

Zomato, Swiggy are the main ones. But I had even read about american brands like doordash.

Last month swiggys validation was dropped from $8B to $5B.

Here's why I feel both companies will die at some point or they will increase their commissions drastically and see a huge loss in revenue. (Maybe they will finally become profitable)

Have you ever checked the price of a meal you want to buy on both Swiggy and Zomato to see which one is cheaper? Once you realize which one is cheaper it's a race to the bottom for whichever will sell 1rs cheaper than the other..
50% off is unsustainable. There is no free food. Someone has to pay for it. When they stop these discounts they will see orders drop by even 70% I feel.
Investors have pumped money to artificially grow a business who's business model is not valid or sustainable.

But eventually if only 1 survives then they will probably stop the discounts and focus more on profitability.

Comments2

@zucc

Universally the rule is survival of the fittest.Moreover people are becoming addicted to get ready food rather than cooking at home.A fast paced life leaves lot of scope for the delivery companies to sustain.So the business may even grow over time.

@letsgohan

It is a race to whoever will give the biggest discounts and survives till the other one dies. Wonder when investor money will dry up. Imagine if both the companies come to an agreement that they will stop giving discounts. What would most ppl do? They would be very used to ordering and order food even without discounts. This is the only way I can see both companies surviving long term.