Ownly launches in H'bad, bets on profitability

Hyderabad, the launch of Rapido's new food delivery service, Ownly, has been marked by an average order value of Rs 250, significantly lower than its competitors Swiggy and Zomato (Rs 400-420). Despite this, Aravind Sanka, Rapido's co-founder, remains optimistic that Ownly can still be profitable due to its cost-effective model centered around smaller orders.

Sanka explains that delivery costs account for 85-90% of the expenses for existing aggregators, making logistics the biggest challenge. To mitigate these costs, Ownly is utilizing Rapido's pre-existing technology, teams, and logistics network instead of building them from scratch.

A key growth strategy for Ownly is attracting a new consumer base by offering lower prices. Currently, 15% of Ownly's orders in Bengaluru come from users who have never placed an online food order before. The Hyderabad-based startup, backed by Prosus and WestBridge Capital, entered the market in Hyderabad on Friday, expanding from its initial success in Bengaluru.

So far, Ownly has onboarded 10,000 restaurants in Hyderabad, with plans to increase this number to 30,000. The service aims to expand to major metros and tier 1 cities such as Delhi NCR, Mumbai, Pune, Kolkata, Ahmedabad, and Surat within the next quarter.

Ownly operates on a zero-commission model, intending to recover delivery costs through consumer fees. However, it's worth noting that Ownly hasn't implemented delivery fees in Bengaluru yet, preventing the company from making profits on Ownly thus far. Sanka anticipates introducing delivery fees in the near future as the company's order volume increases in Bengaluru.

Presently, Ownly is processing over 50,000 orders daily in the city, five months after its full-scale launch. Sanka assures that Ownly will not be focusing on the quick commerce model, as food delivery aligns better with its marketplace and logistics-focused approach. Regarding the overall business, Sanka highlights Rapido's expectation to become profitable at the company level in the next fiscal year, with an IPO not currently in their plans.