Brazil's Food Delivery Sector: DiDi's 99 Food Relaunch Poses Existential Threat to iFood’s Dominance

The Brazilian food delivery market, once a near-monopoly of iFood, is on the brink of upheaval. With DiDi’s relaunched 99 Food deploying a R$1 billion war chest, leveraging its 3,300-municipality logistics network, and targeting underserved secondary cities, the writing is on the wall: iFood’s 80% market share—the highest in global food delivery—is unsustainable. This is a tipping-point moment for investors: pivot to DiDi’s Brazil operations or risk being left behind in a $28 billion market growing at 15% annually.

The iFood Fortress Faces Cracks

iFood’s dominance, built on partnerships with 380,000 restaurants and 55 million users, has long seemed unassailable. Its 2024 operating profit surged 249% to $96 million, fueled by fintech acquisitions like Zoop and its digital banking arm, iFood Pago. Yet three vulnerabilities now expose its fragility:
1. Prosus’s Capital Constraints: Despite its parent company, Dutch-based Prosus, allocating $15 billion for innovation, its reliance on Naspers—a cash-strapped South African tech giant—threatens funding stability. reveals Prosus’s 18% decline vs. DiDi’s 34% rise, signaling investor skepticism.
2. Regulatory Headwinds: Brazil’s antitrust agency (CADE) banned iFood from exclusive contracts with chains over 30 locations in 2023. This regulatory shift has already begun freeing up restaurants to join competing platforms like 99 Food.
3. Secondary Market Blind Spot: iFood operates in just 1,500 cities—leaving 3,300 municipalities underserved. DiDi’s 99 Food, by contrast, already has infrastructure in every corner of Brazil, enabling rapid expansion into untapped markets.

DiDi’s Three-Pronged Attack

DiDi’s 99 Food is not merely a rebrand—it’s a full ecosystem assault:
1. Scalable Rider Network: With 3,300 cities covered, 99 Food’s logistics reach dwarfs iFood’s footprint. Its riders use electric scooters and AI-driven demand-prediction tools, slashing delivery times and costs.
2. Fintech Synergy: DiDi’s global payments infrastructure will integrate with 99 Food, offering diners seamless wallet-to-restaurant transactions—a service iFood’s iFood Pago struggles to match at scale.
3. Secondary Market Play: By focusing on cities iFood has ignored, 99 Food can capture a 30% share by 2025 (per internal targets) without direct confrontations in São Paulo or Rio. Localized marketing and low merchant commissions (vs. iFood’s 30%) will accelerate adoption.

The Risks, and Why They’re Manageable

Critics cite three threats:
- Rappi’s Turbo Segment: Colombia’s Rappi claims 7% of Brazil’s market with its 15-minute deliveries. Yet its reliance on niche urban areas limits scalability.
- DoorDash’s Ambitions: U.S. giant DoorDash explored Brazil in 2024 but retreated due to high costs. Regulatory hurdles and DiDi’s local partnerships make re-entry unlikely.
- Labor Regulations: Proposed rider labor reforms could raise costs. However, 99 Food’s electric vehicles and AI-driven efficiency gains mitigate this risk.

The Investment Case: Pivot to DiDi Now

The math is clear:
- Market Share Dynamics: iFood’s 80% share is a mirage—it’s concentrated in 1,500 cities. 99 Food’s 3,300-city reach creates a path to 30%+ share without competing in saturated markets.
- Valuation Edge: DiDi trades at 4.5x EV/Sales vs. iFood’s 7.2x (via Prosus), offering a margin of safety.
- Sector Growth: IMARC projects Brazil’s food delivery market to hit $28 billion by 2028. 99 Food’s cost-efficient model and ecosystem synergies position it to capture the bulk of this growth.

Final Call: Exit iFood, Enter DiDi’s Brazil Play

The writing is on the wall: iFood’s stranglehold is crumbling. Prosus’s capital limits, regulatory setbacks, and geographic blind spots make its 80% share a relic of the past. Investors should immediately reallocate capital toward DiDi’s Brazil operations—where ecosystem scale, secondary markets, and regulatory tailwinds are combining to rewrite the rules of the game. This is a once-in-a-decade opportunity to back the disruptor in a sector primed for explosive growth.

The era of iFood’s dominance is ending. The future belongs to those who bet on 99 Food.