Online food delivery platform Zomato acquired the Indian operations of Uber Eats, the food delivery platform run by Uber, for around $350 million (Rs 2,485 crore). The merger will consolidate the market and will give a strong competition to Swiggy.
Crux of the Matter
Uber Eats will cease to exist as a separate brand locally. and its users on its platform will be redirected to Zomato’s app.
Zomato will not absorb Uber Eats’ team in India resulting in reallocation or laying off of around 100 executives.
Both combined Zomato and Uber Eats India is expected to cover nearly 50-55% market share in terms of the number and value of orders.
Uber Eats had a stronger hold compared to Zomato in parts of Tamil Nadu, Kerala, and Madhya Pradesh, with about 30% market share.
Uber Eats had tried selling the business to Swiggy but the deal could not be completed.
Uber had projected an operating loss of Rs 2,197 crore in its food delivery business for the five months through December 2019.
Uber had halved its annual cash allocation to the food-delivery business in India to $90-120 million, which had a direct impact on the order numbers.
Uber had relied heavily on discounting to acquire and retain users. While it could only establish market leadership in some small towns and cities.
Also, at the same time, Uber’s India rival Ola too had pulled its focus away from its food-delivery business, Foodpanda, and started to sell private brands on marketplaces.
Curiopedia
Zomato is an Indian restaurant aggregator and food delivery start up founded by Deepinder Goyal in 2008. Zomato provides information, menus and user-reviews of restaurants, and also has food delivery options from partner restaurants in select cities. Zomato has acquired 12 startups globally. In July 2014, Zomato made its first acquisition by buying Menu-mania for an undisclosed sum. The company pursued other acquisitions such as lunchtime.cz and obedovat.sk for a combined US$3.25 million. In September 2014, Zomato acquired Poland-based restaurant search service Gastronauci for an undisclosed sum. Zomato also acquired Seattle-based food portal Urbanspoon for an estimated $60 million in 2015. More Info
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