Walmart’s Flipkart is quietly building a food delivery challenger in India

What happened

Flipkart is getting ready to launch food delivery in India. So far, only its own employees can use it. The test started with a few hundred workers and has grown to more than 8,000. The service shows up as its own tab in the Flipkart app. Riders in special jerseys have started delivering orders on the streets of Bengaluru, the city where Flipkart is based.

Key numbers

• The test has grown from a few hundred employees to more than 8,000.
• Bernstein, a brokerage firm, says the food delivery market is growing 18% to 20% a year.
• Online delivery is just over 15% of India's food-services industry.
• Zomato and Swiggy together serve an estimated 85 million to 95 million paying customers a year.
• Flipkart has proposed a base commission of about 10%. Zomato and Swiggy typically charge restaurants 20% to 25%.

Why this is hard

Many big companies have tried and failed in this market. Amazon started a food service in 2020 and shut it two years later. Google's Areo app did not catch on. Uber left in 2020 and sold its food business to Zomato. Flipkart is different because it is starting from its shopping and quick-delivery business, not from food.

Why it matters

A new player could give restaurants a cheaper choice. Restaurants pay high fees now. Once ads and discounts are added, they can spend 40% to 50% of each order's value on the platform. More competition could also lower prices and fees for customers and restaurants.

What to watch

• Whether Flipkart opens the service to the public.
• Whether it keeps its low commission for restaurants.
• How Zomato, Swiggy, Rapido's Ownly, and Swiggy's Toing respond.