Indian food delivery market is currently ruled by two key players, namely, Zomato and Swiggy. Though both companies have been pushing growth and innovation, currently, Zomato outstrips Swiggy on the profitability and market metrics front. Here’s how the two rivals compare on various aspects of their business and what the future holds for them.
Financial Performance: Zomato Takes the Lead
In FY24, Zomato posted revenues of ₹12,961 crore, beating Swiggy’s ₹11,247 crore. More importantly, Zomato reached a net profit of ₹351 crore, which Swiggy has not yet achieved. Even after cutting losses by 44% to ₹2,256 crore, Swiggy is still far from Zomato in profitability.
Market Share and User Base
Zomato dominates 58% of the Indian food delivery market, a share it has expanded from 54% in FY22. It also has a more extensive active user base with 1.84 crore monthly transacting users (MTUs) compared to Swiggy’s 1.42 crore. That wider reach is supplemented by Zomato’s other offerings, including Blinkit for quick commerce and its loyalty program, Zomato Gold, which enhances order frequency.
Swiggy’s MTUs are supported by its integrated app, which features Instamart, its quick-commerce service. However, Blinkit by Zomato has been growing faster, with 639 dark stores against the much smaller network of Instamart.
Core Business and Growth Areas
1. Food Delivery: Both have a similar average order value, but Zomato leads Swiggy in GOV because of its larger restaurant network and higher order volume.
2. Dining Out: Zomato is ahead in the “dining out” business, which is driven by promotions and partnerships. Swiggy’s acquisition of Dineout hasn’t yet reached the scale of Zomato.
3. Quick Commerce: In quick commerce, Blinkit has a clear advantage over Instamart by Swiggy. Blinkit enjoys better order sizes and take rates, which are driving profitability, while Instamart continues to face margin pressure.
Operational Efficiency and Profit Margins
Zomato’s adjusted EBITDA margins were at 3.4% in Q1 FY25, significantly higher than Swiggy’s 0.8%. This efficiency is driven by higher platform fees, operational improvements, and a focus on profitability in newer ventures like Blinkit.
Future Prospects: Innovation and Challenges
Both companies are significantly investing in technology and expanding their quick commerce and delivery networks. Zomato plans to double Blinkit’s store count by FY25 while Swiggy is looking at improving operational efficiency and offering more.
Competition and rising costs of operations will continue to plague both the players
Conclusion: The Verdict
Although Swiggy is growing to reduce losses and gain a greater user base, it has a significant edge on the basis of profitability, larger outreach, and diversification for Zomato. Given continued innovation and focus on high-margin segments, Zomato looks all set to continue its leadership in the highly competitive food delivery market in India.
