HSBC has raised concerns over the long-term growth and margin assumptions baked into the valuations of food delivery platforms, warning that two-wheeler ride-sharing could evolve into a credible competitor.
The brokerage noted that cost structures in 2W ride-sharing are not materially different from food delivery, making the economic model easily replicable for new entrants.
However, HSBC also acknowledged that customer experience, operational execution, and achieving scale remain key barriers to entry, which incumbent players continue to manage well.
Still, it believes long-term consensus expectations on growth and profitability in the food delivery space are optimistic, and pose downside risk if competitive intensity increases faster than expected.
Disclaimer: The views and target prices mentioned are as stated by HSBC and do not represent the opinions or recommendations of this publication. Investors are advised to consult their financial advisors before making any investment decisions.
