Moneycontrol Pro Panorama | When Market Dominance Works: Why India's Duopolies are Different

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Dear Reader,

New age companies, if they succeed, can become a major force in their businesses. Eternal and Swiggy cornered the food delivery business and are expected to continue to dominate the market. Analysts at Motilal Oswal call the food delivery business a “balanced duopoly”.

Such high market shares generally lead to complacency. However, there are no signs of customer neglect. Competition remains high and Eternal, Swiggy are using their financial muscle and dominance in food delivery to rapidly build up related businesses such as quick commerce.

It is another matter that both Eternal and Swiggy are currently losing money in quick commerce. But the competitive intensity is ensuring good value proposition for consumers.

The phenomenal rise of new-age stockbroker Billionbrains Garage Ventures (Groww) is another example. The discount broking model, digital trading platforms and a sharp rise in retail investors in stock markets catapulted Groww to India’s largest retail broker. Despite the large market share, Groww’s core broking business faces stiff competition, ensuring customer focus.

The initial public offering (IPO) of Groww opened today. You can read our research team’s analysis of Groww IPO here.

Other new-age companies that garnered large market shares in their core businesses are PB Fintech -- in online insurance retail, and CarTrade Tech -- in online auto classifieds.

Several traditional sectors such as aviation, telecom, ports, airports also have limited large service providers in the private sector. In passenger vehicles, four automobile makers dominate the market.

However, the Indian consumer in general has been served well in the post-liberalisation era. Consolidation and entry of deep​-pocketed investors brought world-class products and services to India. Telecom tariffs, even after the recent uptick in tariffs, are among the cheapest in the world. Air fares remain competitive except during festivals and during periods of high fuel prices.

Access to a large market helps companies commit large investments. This helps them derive cost efficiencies and economies of scale. While the investment phase can result in sub-par returns, companies tend to reap the benefits over a period of time. Bharti Airtel’s strong show in Q2 FY26 is a case in point. Read our research team’s analysis of Airtel’s results here.

Of course, market concentration is not always good. But as long as the companies remain sensitive to customer needs and deliver good customer value and financial performance, investors should not be worried. The key is customer centricity and proactive investments.

Investing insights from our research team

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