Bernstein sees Swiggy upside as India food delivery competition grows

Bernstein studied whether India’s food delivery companies could face a major new competitor.

It compared India with China, where companies spent almost $30 billion competing with Meituan.

Bernstein said India’s market is much smaller and still has fewer food delivery customers.

Indian platforms currently earn relatively strong margins because many customers are wealthier.

Serving more lower-income customers could bring growth but may also reduce profits.

A new challenger would need to solve several problems, including low food-service spending and delivery costs.

Bernstein does not currently see an easy alternative business model that solves these issues.

It expects competition in India to grow gradually rather than cause an immediate market-share collapse.

The brokerage continues to favor Swiggy and Eternal, with a higher potential return estimated for Swiggy.