Rappi Targeting Amazon-like Margins
Sebastian Mejia, co-founder of Rappi, on building for multi-verticality in on-demand
The key idea is that Rappi is trying to turn delivery from a thin fee business into a traffic engine for higher margin businesses. Food delivery alone looks more like a courier service, where each order carries real labor and routing cost. Rappi’s model works better when the same app also sells ads, payments, subscriptions, travel, and larger basket grocery orders, while using dark kitchens and dense routes to spread delivery cost across more orders.
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Rappi already had the raw ingredients for this model in 2021. About 75% of revenue came from commissions and delivery fees, but advertising was already about 13% and subscriptions about 10%. That matters because ad dollars and software like merchant services carry much better margins than moving a single meal across town.
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The Amazon comparison is really about mix, not identical business mechanics. Amazon uses a low margin retail layer to attract demand, then makes the economics better with ads, memberships, payments, and logistics scale. Rappi is attempting the same pattern inside local commerce, with food and grocery bringing frequent usage and adjacent services lifting profit per customer.
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Traditional food delivery companies are more boxed in because the core unit is a single restaurant order. Rappi’s multi category design can raise basket size and route density, and its dark kitchens help shift some deliveries from pure point to point dispatch toward a more hub and spoke model, which lowers cost per drop when volume is dense enough.
Where this leads is a more vertically integrated local commerce platform, not just a delivery app. If Rappi keeps increasing cross category usage, merchant ad spend, and financial services attachment, margins should increasingly be set by the blended economics of the whole ecosystem, much more than by the standalone profitability of food delivery.