Rappi Aims to Take on iFood by Partnering with Big Fast-Food Chains

The food delivery app Rappi is gearing up to challenge market leader iFood by negotiating agreements with major fast-food chains, according to the company's new CEO Felipe Criniti. Mr. Criniti, who founded Box Delivery - a platform focused on fast delivery solutions for large restaurants and retailers in Brazil - took over as Rappi's CEO from Tijana Jankovic, who now serves as Rappi's global vice president.

Previously, Box Delivery had partnerships with renowned food chains like McDonald's, Burger King, Pizza Hut, and Outback, along with Zé Delivery, which delivers beverages from Ambev. While Mr. Criniti did not disclose the names of the new restaurant chains in negotiations, the plan is to finalize these deals in September when iFood's exclusivity agreements expire due to a consent decree with Brazil's antitrust watchdog Cade.

For Rappi, this timing presents an opportunity to expand its market presence and compete head-on with iFood. Uber and 99, ride-hailing apps that previously entered the food delivery market in Brazil, withdrew their projects (UberEats and 99 Food) last year due to concerns about iFood's perceived monopoly. With the restrictions imposed by Cade, Rappi aims to capitalize on this turning point and challenge iFood's dominance.

Rappi's journey to compete with iFood started in February last year when the company petitioned Cade to terminate all of iFood's exclusivity agreements with restaurants and bars. The concern was that iFood's market share would further increase after Uber Eats left the country. Cade's decision to end iFood's exclusivity agreements by September this year and limit exclusivity to 25 percent of its restaurant partners is a significant step in fostering competition.

Aside from targeting well-known fast-food chains, Rappi is also looking to expand its presence geographically. With operations currently in 140 cities in Brazil, the company aims to reach 250 cities by 2025, venturing into areas beyond iFood's reach.

As Rappi strategizes to tackle the delivery market, its approach of partnering with big fast-food chains and expanding to new locations could prove to be key to its success in challenging iFood's dominance.