Flipkart to Enter Food Delivery Market With Lower Commission

E-commerce major Flipkart is preparing to enter India's online food delivery market with a mid-August launch in Bengaluru. The company plans to offer restaurants a significantly lower commission rate of 10-11% per order, a move intended to attract partners away from dominant players Swiggy and Zomato.

Incumbent food delivery platforms Swiggy and Zomato typically charge restaurants commissions ranging from 25% to 35%. Flipkart's strategy aims to capitalize on growing restaurant discontent over high commission fees and advertising costs. Reports suggest Flipkart has already begun onboarding restaurants in Bengaluru and will leverage the Open Network for Digital Commerce (ONDC) for partner integration.

The move comes as restaurant associations, particularly in Bengaluru, are actively pushing for lower charges from Swiggy, with a deadline of August 15. Other companies, such as Rapido, have also entered the delivery space with low-commission models, indicating a potential shift in market dynamics.

While Flipkart's lower commission may ease restaurant acquisition, the challenge will lie in shifting consumer habits and building sufficient order density against established players. Swiggy and Zomato have invested heavily in logistics, partnerships, and customer acquisition over the years.

This expansion marks Flipkart's second foray into high-frequency consumer services in 2024, following its quick commerce initiative. The company aims to increase user engagement across its extensive ecosystem of over 500 million registered users.