Uber Eats is up for sale and Zomato is the most enthusiastic buyer. Why is this consolidation taking place?
Read and find out below
To understand how the food aggregators are moving towards consolidation, you may take reference from the political tussle going on (now ended) in Maharashtra. There are two main competitors, but the problem is with numbers. Both of them lack majority due to which, they both are after the third largest party. One who wins support from #3 would come into power.
Food aggregation industry is going through a similar situation. Uber Eats is the third largest food aggregator at the moment and the two main competitors, namely Zomato and Swiggy are vying to prove their supremacy in the market by acquiring Uber Eats.
Why is Uber Eats on Sale?
Uber Eats is on the block and this news couldn’t have come at a more peculiar time. Around a fortnight before, it was being reported that Uber Eats is looking to expand drastically in India and then all of a sudden, it’s up for sale.
Although, we just cannot deny the fact that the food aggregator was facing a big time grind as a competitor. As compared with Zomato and Swiggy, Uber Eats had 10 times lesser daily orders and also, the average order value was less. But, being born with a silver spoon Uber Eats was expected to sustain but it didn’t.
Why is Zomato Interested?
You must have already guessed by now that if Zomato needs to win the number game, then acquisition of Uber Eats would be ideal. But, that’s not it. Strategically, Zomato will gain an advantage that will help it sustain in future as well. We’re talking about the market.
Uber Eats has a decent presence in southern India which is not the case with Zomato. Whereas, Swiggy is strongly present there. Besides this, acquisition of Uber Eats would also bring a new investor on board with Zomato. How important is a new investor to modern-day ventures, we don’t need to explain, do we?
Additional Facts and Info
Uber Eats India is a separate entity than the San Francisco based riding major but it is ultimately controlled from there only. So, the global body has decided that it will exit markets where RoI (return on investment) is not attractive. By the way, Uber Eats has already closed its business in South Korea so if it’s India next on the list, that’s not surprising.