Rapido Plans Entry into Food Delivery Market with Bengaluru Pilot

Indian ride-hailing company Rapido is all set to venture into a new space. According to MSN, Rapido is stepping into food delivery as the firm is looking to pilot a project in Bengaluru. The development comes as Rapido’s latest bid to go beyond its bike taxi and auto offerings.

For its food delivery launch, Rapido is targeting partnerships with major chains like McDonald’s, KFC, Pizza Hut, and high-frequency cloud kitchens to boost its entry into food delivery.

One of the people involved in the discussions said, “Initially, the focus will be on delivering from larger restaurant chains for a shorter distance. These chains have among the densest networks of outlets in top cities from where deliveries of up to 5 km can be made. A substantial part of the orders come from these large chains whereas the long tail of smaller outlets gives a broader choice to the consumers.”

Rapido Food Delivery Launch

Rapido will launch its food delivery service in Bengaluru where a a significant tech savvy population maintains high demand for fast deliveries. The company can improve its logistical operations by first testing in Bengaluru then planning wider expansion. Indian food delivery operations are highly competitive because Swiggy and Zomato dominate the market as leading players.

In the quarter ending December 2024, Zomato reported an average of 306,000 monthly active restaurant partners for food delivery, while Swiggy, one of Rapido’s investors, had 243,400. Both Swiggy and Rapido share a common backer in Dutch investor Prosus.

One of the other sources said, “ Zomato and Swiggy have around Rs 400-450 AOV (average order value) for their food delivery… and even though they’ve started low-cost, pocket friendly options to expand their TAM (total addressable market), there’s a very large base of consumers to be tapped into where AOVs will be not more than Rs 250, where Rapido will have its play.”

How the Rapido Food Delivery Model Might Work

Although not many details are available yet, it is believed that the Rapido food delivery model will leverage its existing fleet of bike riders. Rapido’s existing bike rider fleet will help the company provide speedy delivery services during peak traffic hours. A strong driver network that is aware of the city routes will help to keep the delivery times brief and expenses affordable. Two-wheeler expertise gives the company an advantage because it enables faster delivery service than conventional food delivery by car.

Along with launching the service, Rapido is also said to be working on a flexible payment plan for food deliveries. The company will offer payment flexibility through subscription programs for regular users and per-delivery fees alongside promotional specials to acquire new customers. The introduction of flexible payment options will be essential for Rapido to attract customers and delivery partners since price sensitivity runs high in the market.

Focus on Bengaluru for the Pilot Phase

Rapido food delivery service will operate in Bengaluru as its experimental location. Bengaluru is a good place to start because of its lively startup scene. Launching the pilot there will help Rapido grow its food delivery service among young people who often order food online. The implementation of this initial pilot will generate significant understandings regarding how customers interact with the platform and what obstacles delivery agents face and how to incorporate new partners properly.

While the opportunity is big, the journey will not be easy. The established food delivery platforms will present significant competition to Rapido during its market entry phase. Rapido needs to build restaurant partnerships and manage delivery schedules alongside maintaining food quality standards as well as providing high-level customer service to succeed.

One of the investors said, “Rapido has grown fast in ride-hailing thanks to the subscription model in three-wheelers and four-wheelers… but it has managed to show this growth because it’s come late and is displacing the likes of Ola in the market. The ride-hailing market itself, however, isn’t growing that rapidly, making it imperative for the company to find new streams for future growth.”