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AsiaTrade & Industry

India says goodbye to Uber Eats

By Sharanya R C

India bid farewell to one of its favourite, sought-after apps ‘Uber Eats’. Uber Eats was bought by a major biggie in the food-delivery space, Zomato. Food delivery apps have been a rage in India since late 2000s. The two major players were Zomato and Swiggy, both home-grown firms with a large customer base.

Uber was already a successful player in the ride-sharing space, its entry into the food delivery business in the year 2017 was widely welcomed. But it was a time when Zomato and Swiggy were already well established in the Indian market. Despite this, Uber Eats was able to attract users and retain them primarily because of its discounted rates. The app offered discounts and exclusive deals that roped in a lot of new users. It had more than 10 million users in its kitty.

It was also the first of the food-delivery brands to bring in a celebrity as ambassador for marketing. According to market experts, for a brand to be remembered, there needs to be consistency in its marketing strategy, which Uber Eats had not maintained.

Few have stated that Uber Eats’ business model and the dynamics of the business category could also be the reason for its downfall. The core focus of Uber Eats was mobility whereas Swiggy and Zomato’s was food delivery.
The other factor was also the funding for the company. With the sustained losses, it was only a matter of time before the investors pulled the plug.

Experts say that one of the major reasons for the dismal performance of the app was its discounting strategy. The operational loss was reported at Rs. 2,197 crores.

Zomato has acquired Uber Eats for Rs. 2,485 crores. Zomato’s existing customer base is more than 40 million users and with this recent acquisition, it has a control of over 50-55% of the food delivery market. As per reports, Uber will get a stake of 10% in Zomato.

Uber Eats, though being a late entrant in the food-delivery space, held the user’s interest and attention through its discounting strategy. However, working with limited funding and sustaining in a space where the competitors had a strong reach, was a major disadvantage for the company.

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