How WAAYU Plans To Eat Into Swiggy & Zomato’s Market Share With Its Zero-Commission Strategy

A lot of action is happening in India’s food delivery market, long dominated by the duopoly of Zomato and Swiggy. Fuelled by an unusual demand surge and growing competition (to serve this opportunity) from newer entrants like ONDC, Thrive, Tata Neu, Flipkart and Ola, this paradigm is undergoing a significant makeover.

In fact, driven by this balance of demand and supply, the food delivery market is projected to more than triple in size, reaching INR 2.12 Lakh Cr by 2030, according to a report from Swiggy and Bain & Company. On a broader level, however, the Indian food services market, currently valued at INR 5.5 Lakh Cr, is expected to breach the INR 9-10 Lakh Cr mark by the end of this decade. 

Rewriting the rules of the game is the rise of the 10-minute food delivery model, and no player, in the early or growth stage, wants to be late to the party. Take, for example, Swish, a startup that delivers a range of fast food offerings in just 10 to 15 minutes via its app. Founded in August this year, the startup has already raised $2 Mn (over 16 Cr) from venture capital firm Accel. Raking in funds within just three months of its inception shows the growing interest of investors in this market.   

Moving on, deep-pocketed players, too, do not want to be late to the 10-minute food delivery party. For example, quick commerce major Zepto, quite recently, announced expansion plans for its 10-minute food delivery service, Zepto Cafe, beyond Mumbai. Meanwhile, Swiggy, too, launched its 10-minute food delivery service, Bolt, in six cities. 

Meanwhile, on the other end of the spectrum, WAAYU wants to challenge the dominance of the likes of Swiggy and Zomato in the food delivery space with its unique zero-commission model.

Founded in 2022 by childhood friends Mandar Lande and Anirudha Kotgire, the startup has ambitious plans to capture a 60% market share by freeing restaurants from the trap of high commissions charged by their host platforms.

But, how does the startup help restaurants break free from the high-commission trap?  

WAAYU operates on a subscription-based business model, which is designed to be affordable and easily accessible for restaurants. It charges a one-time setup fee of INR 4,650 and a monthly subscription fee of INR 1,200 from individual restaurants, freeing them from giving commissions on every order. For larger chains with multiple outlets, it offers a flat monthly subscription of INR 2,000 per outlet.

The app has already onboarded more than 3,000 restaurants across Mumbai, Hyderabad, Pune, and Navi Mumbai. Now, it has plans to expand to Bengaluru soon. Some of its restaurant partners in its network include names like Mahesh Lunch Home, Home Chef, R Bhagat Tarachand, Lucky Restaurant, Shiv Sagar Veg Restaurant, Desi Zaika, and Pista House, among others. Additionally, WAAYU also leverages AI to provide cost-effective food delivery services to both consumers and restaurants. 

In September, the Suniel Shetty-backed platform joined ONDC as a seller marketplace, which has been a game-changer for the startup. Besides, it has partnered with buyer apps such as Paytm, Ola, and Tata Neu to expand its customer base and market presence.

WAAYU: A Story Of Multiple Pivots

The journey to build WAAYU actually started in 2017 when the founders floated Destek, a products and services IT company, to offer technology solutions and product development services to businesses looking for digital transformation. Alongside working for clients like Accenture, Infosec and Reliance, the founders started their product journey and launched Legalnextt, a platform for digitising law firms. 

However, destiny had a different plan for them. As the pandemic wreaked havoc, the entire nation came to a standstill. This was when they knew they had to pivot. So, they began to design another product, “Meri Dukaan”, a zero-commission model for grocery stores. 

“The goal was to bring them online. We offered our services for free since many shops were closed, and we wanted to help them operate online and start delivering to customers,” Kotgire said. 

This was the first time when the founders came up with the idea of a zero-commission model. With this (Meri Dukaan), they have digitised over 10,000 retail stores to date. Founded in 2020, Meri Dukaan is an online platform designed to empower small and medium-scale retailers by helping them embrace digitisation and expand their sales. It operates on a paid subscription model. 

While working on Meri Dukaan, the founders onboarded a few restaurants, which allowed them to test their zero-commission playbook with restaurants,” the cofounder said.

The founder’s initial goal was to encourage restaurants to use Meri Dukaan. However, while onboarding restaurants, they received feedback that they should develop a zero-commission platform to could challenge the dominance of Swiggy and Zomato.

“With multiple feedbacks, we sat down with restaurants and their association and thoroughly understood their pain points. We then decided to transform those pain points into features,” the founders said.

Within six months, after interviewing more than 1,000+ restaurant owners to understand their challenges, the founders launched WAAYU in 2022.

Onboarding ONDC & Combating Hiccoughs

In September, WAAYU joined the government-backed Open Network for Digital Commerce (ONDC) as a seller marketplace to bolster restaurants’ and consumers’ access to the food delivery ecosystem.

While the startup was able to acquire 1-1.5 Lakh users on its app until September, the number has grown to 10 Lakh users ever since it jumped on the ONDC bandwagon. 

“Earlier, customer visits and orders were primarily through the WAAYU app, but now they can come from other apps as well. This has significantly expanded our reach,” the founders said.

With the ONDC integration, the founders now expect the current number to double every six months.

On top of this, the number of restaurants onboarded on WAAYU has also grown significantly. “We have grown to 3K restaurants from a mere 500 before integrating with ONDC,” the founders added.

Highlighting WAAYU’s competitive pricing, the founders said, “While a well-performing vegetarian restaurant typically pays between INR 7 Lakh and INR10 Lakh annually in commissions to Swiggy and Zomato, we charge only INR 24,000 per year.”

While ONDC and WAAYU’s zero-commission playbook is proving to be a success for the founders so far, the journey has not been without challenges.

While the first challenge of getting customers to restaurants was resolved via ONDC, the next big challenge was to determine who would handle deliveries. Initially, they partnered with delivery service providers like Dunzo and Grab in Mumbai, but managing deliveries was still tricky. 

The founders solved this by implementing an AI-based platform. “Earlier this year, we created an AI-based platform that connects multiple delivery partners in real time. This system allows us to track restaurant delivery availability and match it with nearby delivery partners from Dunzo, Shadowfax, Portr and other platforms. We identify the available delivery person and their rate, similar to how ride-hailing apps like Ola or Uber assign a fare during booking,” Kotgire said

He added that the platform also ensures that customers receive competitive rates by dynamically adjusting delivery costs based on the partner and time of delivery. For instance, if the delivery is just one kilometre away and the restaurant has its own delivery fleet, there’s no need to wait for an external partner to pick up the order.

What’s Next For WAAYU?

To ensure that the zero-commission model is sustainable in the long term, the founders want to offer a model that doesn’t charge commissions, creates value for restaurants and adds more technology to its platform.

For example, it is looking to integrate 15 point-of-sale solutions, so orders can go straight to the restaurant’s kitchen. This will further make the process smoother and more efficient for restaurants. 

It is also working on value-driven activities to reduce operational costs and improve efficiency.

Going forward, it is planning to come up with a marketplace for restaurants. “We want to bring all restaurants onto our platform. We have over 16 products designed specifically for restaurants, one of which is a marketplace where restaurants can buy everything they need — from cleaning products to groceries — at zero commission. We will charge vendors but not restaurants to provide them competitive prices,” the founders said.

By leveraging their tech background, the founders aim to help businesses by bringing advanced systems for self-ordering, inventory management, and customer analytics to restaurants of all sizes.

“Currently, many restaurants only invest in basic billing systems. But this is the age of technology and information, where much more can be done. We are working on systems like recipe management to reduce food waste by 30%, and we are helping restaurants with customer acquisition,” Lande said.

The founders are also looking to expand the app’s presence into 24 cities in the next 18 months. Starting with Bengaluru, they plan to expand to 15 more cities and cover 5,000+ restaurants in a year. 

According to the founders, the startup has already onboarded around 100 restaurants in Bengaluru, including Udupi Veg, Biryani Zest, and Royal Biryani Kitchen.

Unlike Swiggy and Zomato, who have most of their business concentrated in five metro cities, the founders are targeting 803 districts across India. The startup has also been approached by ONDC to pilot initiatives aimed at digitising roadside vendors and stalls.

On the financial front, the startup reported a revenue of INR 75 Lakh+ in FY24. It projects to generate around INR 2 Cr in FY25, as per the cofounder. 

WAAYU, with its zero-commission model, aims to capture 60% of the online food delivery market. However, given the growing competition from established players like Swiggy, Zomato, Zepto, and the rise of the 10-minute food delivery segment, it will be interesting to see how WAAYU drives disruption in the long term and maintains sustainable growth.

[Edited By Shishir Parasher]