It was speculated a long time back that Uber might have to sell out its Indian online food delivery platoform (Uber Eats) owing to the tricky business model that includes hefty discounts and low margins for indefinite period. Gurugram-based foodtech unicorn Zomato had been successfully managed to sustain in the competitive ‘food delivery market’. Zomato acquired Uber Eats India on Tuesday, January 21st, 2020, and shook the internet. The food delivery business of ride-hailing company Uber in India was under scanner for a long time; however, the acquisition came at a perfect time. The all-stock transaction gives Uber a 9.99 % stake in Zomato.
Uber Eats is now officially Zomato which includes all of Uber Eats business details such as customer information, delivery partners, and order history. The Uber app redirects users to Zomato for the next six months, whenever they chose the option of ‘get food delivered’. This acquisition is somehow a big relief to Uber Eats that has been putting losses for a long time now. On the other hand, Zomato take it as a big opportunity to acquire an established brand and get the benefit against Swiggy, a Bengaluru-based foodtech unicorn food delivery network.
Co-founder and CEO of Zomato Mr. Deepinder Goyal, expressed his pleasure on acquiring one of the renowned food delivery companies that would help them to bolster their India business significantly. He stated – “We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,”.
However, Dara Khosrowshahi, CEO, Uber, continues to put faith in India market and expressed his optimistic views regarding India being a promising market. He was happy about the way Uber Eats performed in India and continued to praise Indian market with a vision to continue invest in Indian market. He continues to throw light on their decision to strategically partner with Zomato. He was impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and had wished Zomato to continue the growing trend.
Acquisition of Uber Eats gives a promising start to the new year 2020. Until last year Zomato, Uber Eats and Swiggy were in a race to dominate the food delivery market. Now, the fight for dominance will be interesting between Swiggy and Zomato who would continue to strive hard to stay competitive. It will be interesting to see when Amazon will enter the foodtech business and make Zomato and Swiggy run for their survival. Despite the negative growth in the food delivery business till near future, the global giants are still looking forward exploring the food delivery market that may exceed $17.0 billion in 2023 at a CAGR of 16% during the forecast period.
Major mergers and acquisition, partnership and collaboration keep food delivery market in news. Considering the immense potential in food and eateries various restaurants have expanded their business operations. Thousands of new restaurant and cafes are seen to be launched owing to the success of this model. The way online food delivery platforms have helped the restaurants to gain profits this trend of new outlets being launched will continue in near future.
Zomato will surely get the benefit after acquiring foodtech giant Uber Eats. There is significant opportunity in Indian food business space owing to rising standards of living, increasing disposable income and growing trend towards online food space. However, foray of Amazon will keep online food delivery companies on hook.
