Beyond the Discount War: Strategy and Survival in India’s Food Delivery Duopoly

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Authors: Akshat Tarush
Cited by: 0

Abstract

India’s online food delivery market has consolidated into a stable duopoly following the exits of Uber Eats and Amazon Food. Standard Bertrand competition predicts that such a market structure should result in aggressive price discounting and persistent margin erosion. However, the observed trajectory of Zomato and Swiggy diverges from this prediction. This paper argues that the Indian food delivery duopoly is better understood through the framework of Nash equilibrium and repeated game theory rather than static price competition. Drawing on financial disclosures, regulatory developments and strategic investments across adjacent verticals, the analysis shows that both firms have shifted capital allocation toward quick commerce and dining and entertainment services. These investments reduce direct confrontation in the core food delivery segment and function as a structural analogue to mixed strategy behavior. Instead of committing exclusively to price based competition, each firm distributes resources across multiple business lines, generating strategic unpredictability and limiting profitable unilateral deviation. The stability of this equilibrium is reinforced by public market discipline that constrains explicit coordination while allowing tacit adjustment. The paper contributes to the understanding of platform competition in emerging digital markets by demonstrating how vertical differentiation can stabilize outcomes in environments where pure price rivalry would otherwise destroy value.

Fields of Study & Subjects

Digital Platforms and Economics Merger and Competition Analysis Digital Economy and Work Transformation

Publication details

Journal / source
SocArXiv (OSF Preprints)
Publication date
8 March 2026
Language
EN
Document type
Preprint