With the latest deal, Zomato now holds over 50% market share, according to Yagnesh Sanghrajka, CFO of venture capital firm 100X.VC. Swiggy has most of the other half, making the sector effectively a duopoly.

Ola finally decided to bow out of such bloodletting.

New diet

The Bengaluru-based on-demand taxi company began experimenting in the delivery space five years ago.

In 2015, it launched Ola Cafe in a handful of metros, only to shut it down within a year. Its second attempt, Ola Store, a hyperlocal grocery delivery service, fell flat, too.

The Foodpanda acquisition was its third shot.

However, Foodpanda’s buzz, too, tapered off soon. But this time, foresight struck—in mid-2019, to be precise—and the company changed course.

Last May, Ola pivoted away from the business, reportedly laying off 40 employees and 1,500 delivery executives and delisting third-party eateries. It then began building a portfolio of its own food brands. Today, Ola Foods has a network of 40 cloud kitchens across six cities: Bengaluru, Hyderabad, Mumbai, Pune, Delhi NCR, and Chennai. By the end of 2020, it is looking to expand to 80 more.

“My take is that Ola will take a swing at Zomato and Swiggy’s market share and leverage the operational model to win over loyal customers and unhappy Zomato or Swiggy users,” said Gabriel Appleton, co-founder of data intelligence company Vumonic Technologies. “For example, cloud kitchens exclusively serve delivery orders, so theoretically they can beat Swiggy and Zomato on quality and speed of delivery. We will see what their discounting strategy is or will be, but potentially matching price and beating them on speed and quality is a winning combo.”

The move has also turned Ola’s competition into collaborators in a manner of speaking. “Ola has transitioned into a brand-based offering with a few restaurant brands that are also available on Swiggy, Zomato, and Dunzo,” said Rohan Agarwal, director of consultancy RedSeer. This means Zomato and Swiggy’s growth is actually good news for Ola.

Its strategy to set up physical stores for its private brands, à la The Great Indian Khichdi Experiment in Bengaluru, has the potential to scale up, too, says Sukriti Sethi, analyst at Noida-based TechSci Research.

For now, it looks like Ola can have its cake and eat it too.

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