For years, Zomato and Swiggy have held a significant portion of India’s food delivery market, creating an unchallenged duopoly in the segment.
In recent times, we have witnessed the emergence of some contenders challenging the dominance of Zomato and Swiggy, such as the government’s Open Network for Digital Commerce (ONDC) and Thrive, among others.
Read More: ONDC sparks price war, threatens Zomato and Swiggy dominance in food delivery space
Once again, the food delivery industry has a new contender in the form of WAAYU. The platform, which operates without charging commissions, made a splashy entry on May 8th, aiming to disrupt the status quo dominated by Swiggy and Zomato. Its objective is clear – to empower restaurants by freeing them from the burden of high commissions levied by other food delivery platforms.
WAAYU was founded in late 2022 by Anirudha Kotgire and Mandar Lande, with the backing of Indian Hotel and Restaurant Association (AHAR) based in Mumbai and Bollywood actor, Suniel Shetty.
Partnering with AHAR has enabled WAAYU to save a substantial amount on customer acquisition costs. The founders have a unique plan to use these savings to enhance customer retention by passing them onto their customers.
“The tie-up with the association is helping them acquire thousands of restaurants and millions of customers,” Suniel Shetty said at the launch event on Monday.
According to reports, WAAYU has succeeded in getting 1,500 restaurants in Mumbai to sign up on its app, and the total number of downloads for the app has now crossed 25,000.
Could WAAYU be the next bully in the food delivery market, challenging Swiggy and Zomato’s reign?
Similar to Swiggy and Zomato, WAAYU is a food delivery application that assists restaurants in managing their online orders. However, what sets it apart is its role as an aggregator that operates without charging exorbitant commissions per order. This is a significant differentiation, as many restaurants struggle to operate with slim profit margins when burdened with such fees.
By following a zero-commission strategy, the company aims to motivate restaurants to offer competitive pricing and pass on the benefits to their customers, as per their assertion.
“With WAAYU, restaurants will start offering their own schemes. Further, they will be able to add value to their products, which would make a huge difference,” said Shetty.
One of the Co-Founders, Anirudha Kotgire, discussed how the platform generates revenue. He said “We have 16 revenue streams, but not all will kick in from the beginning. We will have a fixed fee deal with the restaurants at an introductory price of INR 1,000 per month per outlet. Later, it will be increased to INR 2,000 a month.”
Additionally, Kotgire mentioned that there is a one-time onboarding set-up fee of INR 3,650.
Although the co-founders of WAAYU stated that restaurants would have the option to choose between Grab, Dunzo, or their own in-house delivery personnel, they did not specify who would bear the delivery costs.
Considering the approximate monthly cost of INR 2,000 that restaurants would incur to utilize WAAYU’s platform, there is a significant possibility that these establishments may ultimately be responsible for covering delivery charges.
In addition, the platform has created a specialized application for delivery personnel, allowing restaurants to effectively oversee and organize their own delivery fleets.
WAAYU aims to provide restaurants with enhanced flexibility and control over their online ordering system, offering instant payments through the UPI network. By adopting this approach, the platform’s founders intend to counter the longer payment cycles of competitors such as Zomato and Swiggy, which can negatively impact the cash flow of restaurants.
WAAYU’s nationwide expansion strategy:
The Co-Founders have expressed their intentions to soon expand to additional cities.
“Our plan is to add additional 10,000-plus restaurants in Mumbai, Pune and the suburbs in the next three months, and then expand WAAYU to both metro and non-metro cities across India,” Lande said.
Additionally, WAAYU has plans to integrate with ONDC, which is also making its mark as a prominent player in India’s food delivery market. This integration opens up interesting possibilities for how WAAYU and ONDC can collaborate to strengthen the network and provide enhanced services to their users.
Adding to the competitive landscape, Thrive, a food delivery startup backed by Coca-Cola, presents an interesting potential rival for WAAYU. With its focus on reducing commission fees and adopting a more agile and restaurant-friendly business approach, Thrive aims to challenge the dominance of Swiggy and Zomato. This intensifies the competition between Thrive and WAAYU, making the food delivery market even more dynamic and compelling.
Regardless of the outcome, it will be captivating to witness how WAAYU competes against the formidable presence of Swiggy and Zomato in India’s thriving $5.3 billion food delivery industry. The future will unveil the dynamics and performance of WAAYU as it navigates through this competitive landscape.
Interestingly, both Swiggy and Zomato faced setbacks at the beginning of the week. Swiggy witnessed a reduction in its valuation to $5.5 billion by one of its significant investors, Invesco. On the other hand, Zomato’s two-week-long positive streak on the Bombay Stock Exchange (BSE) came to an end as it experienced a 7% intraday decline on Tuesday, May 9th. These developments marked a challenging start to the week for both food delivery giants.
Read More: Zomato’s share prices drop as ONDC threatens with cheaper food options