Budget food battle shifts to winning new users

Growth slows as Swiggy, Eternal, Rapido and others test competing low-cost models

Updated: August 3, 2026 05:07 IST

Low-Cost Battleground: Eternal and Swiggy Spar Over Differing Low-Ticket Food Delivery Models

Food delivery platforms are converging on the same challenge: how to profitably serve the next wave of customers. With spending by existing users flattening and quick commerce reshaping consumer behaviour, they are betting on sharply different low-cost delivery models to drive growth, even as they publicly question each other’s economics.

The debate came into the open last week with Eternal founder Deepinder Goyal and Swiggy food marketplace CEO Rohit Kapoor taking aim at rival approaches. In Eternal’s shareholder letter, Goyal said Bistro was the company’s answer to the question these platforms like Toing and Ownly are pretending to solve. The traction these platforms were seeing was driven purely by low prices and price-driven traction without structural economics tends to resolve itself, he wrote.

Kapoor, in turn, questioned the vertically integrated micro-kitchen model that Bistro operates on, an approach Swiggy itself experimented with through Snacc before shutting it in the March quarter. The model requires a different kind of expertise, is probably more expensive to build, and its economics remain highly uncertain, he said.

Growth Stagnation

The sharp exchange reflects a broader shift in the market. Food delivery growth is increasingly coming from adding new users rather than extracting more spending from existing ones. Eternal’s net order value per monthly transacting user has remained around Rs 3,900 for the past five quarters, while Swiggy’s gross order value per user has hovered around Rs 4,900. Both companies expanded their user base by about 18% year-on-year during the June quarter, but Swiggy’s platform frequency declined to 3.87 orders, marking a sixth straight quarterly fall. Both also reported a decline in restaurant partners for the first time, attributing it to outlets going offline during the LPG shortage.

Analysts say quick commerce is partly behind the shift. As consumers become accustomed to groceries, ready-to-eat meals and snacks arriving within minutes, food delivery platforms are seeing lower ordering frequency, forcing them to widen the customer base instead. Kapoor said only about one in 10 Indians has ever ordered food online, with most using the service infrequently, making affordability the next growth lever.

Divergent Strategies

Swiggy’s response is Toing, a standalone budget food delivery app now operating in 50 cities. The company said two out of every three Toing users are either new to the platform or previously dormant customers, describing its spending as discretionary user acquisition that can be dialled back if required. The company does not disclose Toing’s financials separately, although its Platform Innovations segment reported adjusted revenue of Rs 69 crore, up from Rs 13 crore a year earlier, while adjusted Ebitda losses more than doubled to Rs 131 crore. Swiggy’s guidance of 18-20% growth for its food delivery business excludes Toing.

Eternal has chosen a different route through Bistro, where it cooks and delivers its own food. “If you want to make food delivery work at Rs 50-150 price points, you can’t do it without supply chain innovation,” Goyal said, describing Bistro as closer to a food manufacturing system than a restaurant. The service adds around 10 kitchens every quarter and currently operates only in Delhi-NCR and Bengaluru. Eternal does not disclose Bistro’s financial performance separately and excludes it from its headline order value.