Indian food aggregator platforms Swiggy and Zomato are listed in the world’s ‘Top 10’ e-commerce based food delivery companies.
A report published by Canada-based global research firm ETC Group titled “Food Barons 2022 – Crisis Benefiting, Digitalization and Shifting Power” placed Swiggy and Zomato in 9th and 10th place, respectively.
Most importantly, they are both part of more than 100 Indian unicorns. Unicorns are companies with a total value of more than USD 1 billion.
According to the research firm, the food delivery industry refers to digital, on-demand platforms for ordering and paying for ready meals, groceries and other retail items. Restaurants/retailers fill the orders and couriers deliver them to customers within a prescribed time frame.
The Chinese listed food platform Meituan topped the list, followed by the British Deliveroo and the American Uber Eats.
Furthermore, Ele.me, DoorDash, Just Eat Takeaway/Grubhub, Delivery Hero and iFood were in 4th to 8th place.
“The food delivery industry is rapidly consolidating, but ownership is a moving target. As companies compete for regional hegemony, they buy, sell and trade interests with competitors,” the report said.
“Venture capital and investment in Big Tech has fueled the industry, but companies have yet to turn a profit, even in the sector-friendly conditions of the global pandemic when delivery became more necessity than convenience,” it added.
Against that background, it said it is currently working on adapting its business model to become profitable — particularly by adding grocery and pharmacy delivery services.
The report also focused on issues faced by workers in the gig economy.
Delivery drivers are considered independent contractors rather than employees in most parts of the world. They are therefore not eligible for social security, personal injury or other benefits.
“There is evidence that some governments are willing to implement labor reforms to try to end the free ride of the platforms. In the US, New York City became the first city to pass legislation to regulate the food delivery industry, fixing minimum wage and other protections for workers,” the investigative report added.
A major problem facing the industry, the report said, is the significant increase in waste from single-use take-away packaging.
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