• After about a decade since online food ordering through aggregators began in India, the space today is at an interesting juncture.
• While the pioneers no longer exist, the industry is now essentially a two-horse race between Zomato and Swiggy.
• This is because several players made hasty retreats when the opportunity came knocking while a few others shut down permanently likely due to their inability to scale up and/or belief that prospects of achieving positive unit economics were grim.
• However, the main reason for this consolidation is that demand over the years was largely stimulated by exceptionally high levels of marketing and promotional spending (cash-backs, discounts, referrals, subsidized delivery fees, etc.).
• Essentially, these companies were growing mainly on the back of constant funding support.