Rappi's zero commission Brazil strategy

This move shows that winning Brazil means buying restaurant supply before it shows up as consumer demand. In food delivery, the app with the best set of local restaurants usually gets the order, then gets the courier density, then gets the next restaurant. That is why Rappi is giving up commission revenue and committing fresh capital. It is trying to break iFood's supply advantage in Brazil's biggest cities and then carry that traffic into grocery, ads, subscriptions, and fintech.1 2 3 4 5

• Rappi's core business still depends heavily on marketplace economics. Earlier work estimated about 75% of revenue came from merchant commissions and delivery services, with ads and subscription making up most of the rest. A zero commission push therefore sacrifices the largest revenue stream in order to change market share, not just to boost short term order volume.2 3 4
• iFood's position in Brazil was reinforced by exclusivity with restaurants, strong enough that Rappi filed the complaint that triggered CADE's 2021 intervention. CADE later settled with iFood in 2023, limiting exclusivity rather than banning scale advantages outright. That opened the door for rivals, but it did not remove iFood's installed merchant base or consumer habit.3 6 7
• Rappi has long argued that the payoff from heavy investment is a denser network and a more efficient delivery model. Its dark kitchens and micro fulfillment centers are meant to turn one order, one trip logistics into hub and spoke logistics, where couriers can stack orders on tighter routes. That can improve margins later, but only after enough order density exists to fill the fixed infrastructure.2 5 8

The next phase is a race between subsidy funded entry and network driven lock in. If Rappi can use Brazil to build repeat food demand and then layer on grocery, ads, Prime, and payments, the upfront spend can look like customer acquisition for a broader super app. If not, Brazil stays a costly defensive front while iFood keeps the profit pool.1 2 4 5