Delhivery and TCI Express have very different business models which reflects in their margin profile and balance sheet. TCI is very selective in their customer segments while Delhivery seems to have taken a kitchensink approach (growth at any cost).
I’m yet to see a new entrant disrupting a market purely on the basis of simply pricing in any industry. They may eat into some business of established players but eventually need for cash flow generation, sustainable margins and scalable business growth all catch up. So if the new entrants don’t have a differentiated offering, they simply fizzle out or are forced to scale back on price war.
Take diagnostics space. For two years people thought new players with cheap diagnostics service providers, backed with huge P/E money, will disrupt existing players like Lalpath. But now that’s all behind us.
TCI Express has maintained their pricing power and kept their balance sheet healthy with strong return metrics (industry leading ROE and ROCE) in the face of intense competition.
So when the new entrants eventually succumb to the pressure of showing profits and cashflows, we’ll see strong differentiated incumbents emerging much stronger.