Delivery War: Winner-Take-All

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Today where many firms are facing challenges to run their operations and to keep up the growth rate in these unprecedented times, start-ups like Swiggy and Zomato have found a new growth opportunity to utilize their existing fleet of the food-delivery specialists to deliver groceries. In the view of the current scenario, looking at Swiggy’s and Zomato’s move to expand into grocery delivery services in Tier 1 and Tier 2 cities, undoubtedly, provide relief to everyone as the old patrons of the grocery delivery service, Big Basket, and Grofers of the world are unable to satisfy the demand. However, analyzing the move of two food delivery giants from Al Ries’ and Jack Trout’s immutable marketing laws’ perspective, indicates that they might fall into the trap of “Law of Line Extension,” which suggests that when a brand goes for line extension, then it witnesses a sudden spike in its sales, which tapers off with time negatively impacting the original offering of the brand. Hence, going by that logic, both Swiggy and Zomato will experience the spike in its growth in present circumstances as there is a void between the demand and supply to be filled. But later, when things will get back to normal, then it will be interesting to see how the two brands fare. It will be too early to predict the outcome of this move with certainty. However, one thing is sure, when everything rolls back to normal, then the competitive dynamic of e-grocery delivery services will be changed entirely.          

Current Scenario
Grocery delivery services market is highly cluttered with several hyperlocal players, grocery specialists like Big Basket, Grofers, and some big players like Amazon pantry and Flipkart Supermart. As per the Redseer, the significant chunk of the market is being captured by the Big Basket and Grofers, indicating that large horizontals have only made a minuscule dent in the market.


Future Landscape of Grocery Delivery
As per Redseer’s report, the online grocery market is expected to reach $10.5 billion by 2023. The current situation will bring in new users to the online grocery market. Thus, making more and more people habituated to the seamless and effortless grocery shopping experience. Prospective growth in market size has attracted several players to the arena with Swiggy and Zomato, also making to the list. Now, it will be interesting to see which players will last with what market share under its name. As per the “Law of Ladder,” Market share being captured by the brand will be coherent to its position on the ladder in the prospect’s mind. As the time will pass, as per the “Law of Duality,” eventually, only two players will survive and come out victorious, sharing the majority of market share and leaving the rest of the pie to be distributed among the remaining players.  
   
Who do you think will win this delivery war? 😊

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